Lloyds Metals & Energy (NSE:LLOYDSME) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to Lloyds Metals And Energy Limited q one FY twenty seven earnings conference call hosted by Nomura. As a reminder, all participant lines will be in the listen only mode, and there will be there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over to mister from Nomura. Thank you, and over to you, sir. Thank you. Good afternoon, everyone, and thank you for joining us today. We at Nomura are pleased to host Lloyd Metals And Energy one q f y twenty seven earning call. From the management, we have with us today mister Rajesh Gupta, managing director mister Riya Sheikh, CFO, mister SK Naridi, director of finance from Triveni, mister Hemankur Upadhyay, director of finance, international strategy and operation, and mister Chintan Mehta, IRO.

1:13 Without much ado, I will like to invite Mr. Rajesh Gupta for his opening remarks. Over to you, sir. Good evening, Ashtoreen and everyone else on the conference call. A very warm welcome to all of you joining us on our Q1 call. And thank you to Jayshalip and the entire team for hosting this call today. We deeply value the engagement and the platform you have given us to share the Lloyds Metals story with the investor community. Before I speak about the quarter, I want to pause on a milestone that is very special to all of us at Lloyds as well as I hope for all the people on the call. This quarter, we achieved and crossed a market capitalization of INR 1 lakh crores, a level that we have seen a decent dream not very long ago.

2:04 This might not belong to the management or the team. It belongs first and foremost to every investor and to the company that stood with us through the early years of uncertainty, through the ramp up and through every project that we have executed since. It is a reflection of the trust and we have placed in our ability to execute. We are deeply grateful for it, and I want to assure you that we carry the responsibility with all the seriousness that it deserves. Q1 has been an outstanding quarter for Lloyds on a stand alone as well as a consolidated basis. Revenue of INR 7,354 crores, more than tripling year on year is, of course, a milestone for the group.

2:53 While Liyaz takes you through the numbers in details, I would like to talk about some of the interesting events that have happened. Our second plant or pellet was commissioned in May 2026. And again, in a very short period and as scheduled and within budget. I'm proud to say our pellet operations reached 100% capacity utilization within just four months. Pellet production stood on this quarter at 1,690,000 tonnes at a very, very healthy realization. A large part of realization comes from the geographical mix of our sales. We have expanded our export reach to Kenya, South Korea, Indonesia and of course, China.

3:39 And while deepening our presence across Central And Southern India, most of the markets in Southern India or Central India are more or less catered to entirely by us. This spread of markets, roughly threefour of domestic and onefour of export, is helping us to place volumes when it predict pricing. Why I have been focusing on pellets is because that's a big factor of the margins that we are reporting off. Including the slurry pipeline that has structurally lowered our logistic and freight cost for iron ore. A very effective fuel mix, including ship partly from LFTS to LNG, which is, of course, a greener mix, has even better cost control across the value chain.

4:29 Capital or capital logistics and a great share of value added products together means that these are structural margins and not cyclical ones. We are confident that these margins can sustain in the cyclical commodity because we continue to actively pursue better and higher value markets for every product we make, changing realization and not just volume. And this is exactly the discipline that we want intend to replicate as we commission our first 1,200,000 tonne long production seed plant very shortly. The same mitigation, the same cost focus and the same market first approach will carry into our steelmaking journey and of course, into copper.

5:15 Even as we deliver these results, the next leg of our project pipeline is already taking shape. BHG beneficiation, the third pellet plant and the next line of our total slurry handling and aluminum handling system without trucks. Together, these projects deepen our integration, expand our value added capacity and further lower our delivered cost. We are confident that this pipeline will continue to drive meaningful value for the company over a period of time. Liyadh will now walk you through the stand alone financial performance. Thank you. Thank you, Rajesh, and good evening, everyone.

6:01 Let me take you through our stand alone financial performance for the first quarter of FY 'twenty seven, which has been our strongest quarter yet across every metrics. Revenue from operations for the quarter stood at INR 5,413 crores, a sharp 127 percent growth year on year and 10% sequentially over quarter four. EBITDA came in at INR 2,120 crores, growing 172% year on year and 31% quarter on quarter. This growth was driven by higher iron ore EC limits, a faster than planned ramp up of the pellet plant and improved spodumene volumes. PAT for the quarter was INR $15.27 crores, up 141% year on year and 43% sequentially.

6:52 Profit before tax stood at INR 2,008 crores. I want to dwell on margins because this is the real story of the quarter. Our EBITDA margin came in at 39.2%, the best margin the company has ever reported. Importantly, this has scaled on both fronts, up six thirty nine basis points year on year and up six thirty one basis points quarter on quarter. Very few quarters see margin expansion of this order on both a year on year and a quarter on quarter basis at the same time. Three factors drove this: first, the commissioning of the slurry pipeline towards logistics and freight cost on iron ore and pellet. Second, higher realization across products strengthen the overall mix. And third, and more structurally, a better product mix with a higher contribution from value added products like pellets led to meaningful margin expansion.

7:45 The shift is visible in our mix. Value added products now contribute 41% of stand alone revenue and 40% of EBIT versus just 132%, respectively, a year ago. This is a structural rerating of the earnings base, not a cyclical spike. Product wise performance. Iron ore production for the quarter was 6,050,000 tonnes, up 53% year on year, and sales was 5,460,000 tonnes, up 58% year on year. Realization stood at 6,068 per tonne with an EBITDA of INR 2,002 and 30 per tonne. Our monthly run rate is now upwards of 2,000,000 tonnes. DRI and Power. DRI sales volume stood at 183,900 and twenty tons, up 133% year on year at a realization of $27,376 per ton and an EBITDA of INR 6,273 per tonne. Power volumes were up 87% year on year.

8:54 Pallet production was 1,690,000 tonnes, reaching 100% capacity utilization within four months of the second plant coming on stream in May. Realizations stood at INR 11,783 per tonne and EBITDA at INR 5,803 per tonne. The study pipeline and captive ore, coupled with strong realization drove these robust pellet margins. Our sales mix was 75.3 domestic and 24.7% export. Coming to CapEx and the net debt. The company incurred CapEx of INR 13,530 crore during FY 'twenty four to FY 'twenty six and a further of INR 3,005 crores in quarter one FY 'twenty seven alone. As we continue to build out our downstream and beneficiation projects.

9:42 Stand alone net debt as of June 30 stood at INR 5,616 crores, very comfortable relative to the EBITDA and business is now EBITDA of the business is now generating. Let me add one point at a consolidated level. Our consolidated net debt remains around 19,000 crores. A significant part of this pertains to the Shimaf acquisition, which we are actually working to renegotiate on more favorable accounts. We will keep the investors informed as and when this materializes. To summarize, record revenue, record EBITDA, record PAT and our best ever margin expanding on both a year on year and a quarter on quarter basis. With that, I will hand over to Narayan Dijji for the Sivanee's performance. Thank you, everybody.

10:33 Good evening, everyone, and thank you, Rajesh ji and Riyad ji. For us, at Triveni, the growth has always been about disciplined execution and getting the fundamentals right quarter after quarter. Let me take you through Triveni's performance for Q1 FY 'twenty seven. For Q1 FY 'twenty seven, the revenue from operations for the quarter stood at 2,672 crore, which is up 63% year on year. EBITDA came at INR $6.58 crore, which is up 145% year on year, with margins at 24.63%, an expansion of eight twenty seven basis points over the same quarter last year. Cash FAC stood at INR $4.47 crores, up 145% year on year, with cash margins cash FAT margins improving five twenty two basis points to 16.72%.

11:27 Our margins this quarter were marginally impacted by higher fuel costs due to this Gulf prices. We are actively pursuing pass through of these costs to our clients, and those negotiations are currently underway. Having said that, I want to be very clear that our guidance of 28% to 30% EBITDA margins on a full year basis remains intact. We are confident of getting there as pass throughs conclude and as volumes scale throughout the year through the year. Operational performance, iron ore volumes, including BHQ, stood at 19,090,000 tonnes for the quarter, that's nearly doubling from 9,870,000 tonnes in Q1 last year. Core volumes from Indian operations, including overburden, were 26,020,000 cubic meters, with overseas operations at 5,930,000 cubic meters and by right at 2,140,000 cubic meters.

12:25 Garchirovi operations, Now following the environmental clearances obtained in FY 'twenty six, our ROM handling capacity at Garchiroli has been enhanced from 10,000,000 tonnes per annum to 55,000,000 tonnes per annum. That is a 5.5 fold increase. The mine achieved a total production of 12,830,000 tonnes, including BHQ during the quarter. Full scale operations have commenced at Central Hill and the FY 'twenty seven equipment modulation plan is on schedule. On Greenfield, 88 electric equipment units are now operational at the mine with a further 20 at the railing. We have also mobilized 14 mobile crushers and 26 HEMM units for BHQ crushing and are deploying higher capacity to 40 toner dumpers to support the enhanced production.

13:18 In other operations, in Odisha, the Lassata Pacheri mining operation commenced in Q1 FY 'twenty seven with a target of 1,500,000 tonnes per annum and the Dulphahar mine is expected to commence in Q2 FY 'twenty seven with a target of 3,000,000 tonnes. Several existing mines have been scaled up, and we expect Odisha volumes to grow 39% year on year to 34,000,000 to 35,000,000 tonnes in FY 'twenty seven. On the coal side, our Preveni Selic operations retained a five star rating from the Ministry of Coal and the one position among open cast mines in India for the second consecutive year. In our logistic business segment, at present, we have around 150 electric and LNG vehicles, and we propose to add another 200 vehicles, of which 50 will be LNG and 150 will be EV to our fleet, aiming to make the fleet of green vehicles.

14:15 Already 20 charging stations are installed and in the process of we are in the process of installing another 30 charging stations. It will give us 30% to 40% cost savings and increase in EBITDA of this particular operation from 32% to 40%. On gold, Geomassur, which is India's first private integrated gold mining and processing operation, this was formally inaugurated in July 26, and it delivered ROM production of 170,000 tonnes and drilling of over 14,000 meters in its first quarter. Trivanna's focus remains clear, scale responsibly, execute efficiently and protect margins through productivity and cost optimization. The pipeline into FY 'twenty seven across Gulchiroli, Odisha and CORE is strong, and we are confident of sustaining both growth and profitability.

15:07 With that, I'll hand it back to open the floor for Q and A. Thank you. Thank you very much. We will now begin the question and answer Anyone who wishes to ask a question, may please press star and 1 on their touch tone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference call, please limit your question to two per participant. Ladies and gentlemen, we'll wait for a moment while the question queue assembles.

15:57 The first question is from the line of Vikas Singh from ICICI Securities. Please proceed with your question. Good afternoon, sir. Thank you for the opportunity, and congratulation on very good set of number. Sir, my first question pertains to our copper division. We have driven in a slight rate at growth in the next couple of years in the copper production, basically, from almost 8,000 to 86,000, including the carium. So if you could give us the roadmap and the CapEx, how much you have already invested the equipment ordered for this, it would be really helpful. Can you just repeat the question? There was some disturbance.

16:47 Yes. In the Copper division, we have given a road map to almost over a lakh ton of production of copper as well as the carium. So what kind of CapEx you have already done? What if the CapEx would go in FY twenty twenty seven, twenty eight? Because if you want this ramp up to be happen 2029, the capacity it has to be completed by 2028, I believe. So CapEx... So basically, we have two assets. Actually, one of them, the CapEx is already completed, which was part of the acquisition. So that CapEx is already done. A large part of it was already done last year. So that number is a total of around $130,000,000 which has been invested into the asset.

17:37 So that is for the current operating asset, which is operating at the rate of around 800 tonnes per month. So roughly 2,400 tonnes per quarter is the average production from there. The larger asset, which is the JV company, which we have acquired together with the U. S. Partners, So that CapEx actually has already been ongoing because this was an asset which was under construction. So when we acquired it on the books, along with the liabilities, there is a total asset book size of near about $800 plus million. And it would take a total CapEx of around $300 plus million to get it to completion. So as of now, we have done part of it, and we intend to complete that CapEx over the period of next nine months.

18:26 And we intend to have the assets operational somewhere in Q1 of FY 'twenty eight. So for both the projects combined, 300,000,000 in the next nine months, we would be spending. That assumption is correct? Correct. So and the CapEx that we are talking about, that is together as a JV company. So effectively, our CapEx will be part of it. And the balance basically, I mean, we'll have to do the contribution as per our share. So out of that 50% contribution, how much you're planning to invest from the India business and how much you're taking there? So we are looking at all options. So we are in discussion with multiple financing parties, which includes U. S.-based financial institutions as well as Africa based institutions and the Indian institutions.

19:18 So we'll be looking at partly equity infusion and also partly debt infusion. I think we'll get the clarity on it in the next three months when we intend to achieve the financial closure for that. Got it. And sir, my second question has a two part. Firstly, any update on the projects with Tata Steel, if any progress has been made there? And secondly, can in our existing capacity, have a leg room to further expand the EC limit in case if we want to? Yes. So Tata Steel, we have made reasonably good progress right from starting operating the plant, which was already there, part of the JV company.

20:06 So we reported an EBITDA of around INR 99 crores, which is as per the long term conversion contract that the company has. So that will continue as it is. Over and above that, we have started a few long term projects with them, which are primarily on two fronts. One is the MDO contract. So we have started a very small mining operations, which is in the West mines. And second, we are also evaluating in some of their mines if we can ramp up the production faster. And we can also increase the EC capacity for some of those mines. So there, the value addition of this JV company will be much higher. And so current MBO contract is a small step towards that direction, but our teams are evaluating and making a plan on how we can increase the production capacity in these mines over the next three to five years. So that's the longer term plan.

21:00 And also, we are evaluating slurry pipelines, which will be developed as a service model, which is on the BOT model. So the JV will develop the pipeline. And they will be providing it as a service to TSL, and it will be connecting the Tata Steel mines with their steel plants. So that evaluation and technical studies is also currently going on, and we'll get to know more on it in the coming year. Sir, just a clarification. Is these are the NINL of Goshen mines for which you have been jointly developing or as an MDO or how is the status? No. Currently, so we are looking at mines, some of the mines, which will be scaling up. So the final set of mines where all will be ticking up the empty is not clear.

21:51 We are still evaluating that. But yes, whichever mines are ramping up. So some of the mines which you mentioned will be ramping up. So it is a decision which will be made by Tata Steel. But we are evaluating all the mines wherever scaling up is required, and if we can help in the faster scaling up, it may be taken up by the JV. Noted. And second part of the question in existing... Sorry to interrupt, Vikas, sir. Maybe request that you return to the question queue for follow-up. Fine, ma'am. No issues. Yeah. Thank you, sir. Ladies and gentlemen, in order to ensure that management is able to address questions from all the participants in the conference call, Please limit your question to two per participant. The next question is from the line of Jay from Philip Capital. Please proceed with your question.

22:41 Hi. Good afternoon. So firstly, congrats on a good set of numbers. So my question is actually on the pellet segment. So we've seen pellet profitability go up this quarter. I just want to understand how much of that is your export mix and pellet premiums versus how much of it is captive on slurry pipeline? And as we scale up in the next few quarters, is this a margin that we can build in? Or is there something one off about this? So 25% of our production is being sold as export right now. The slurry pipeline saving is around INR 900 to INR 700 a ton, and that will remain sorry, 500 a ton, that will remain. And we assume that the export quantity will be more or less remain the same.

23:31 Right now, the I mean, given the vagaries of the market, sometimes export is better, sometimes local is better, but we hope to maintain our product mix, which will serve all our customers regularly, including the international and the Indian ones. Okay. Got it. Thank you. Thank you, sir. The next question is from the line of from. Please proceed with your question. Yeah. Thank you, and congratulations for that set of numbers. So my first question is in regard to our iron ore business where volume has increased sharply by 58% year on year, but EBITDA per ton has remained flat year on year, and I've not seen any operating leverage benefit.

24:22 Can you provide some light on it, sir? Think the sales price has basically remained the same over the last year on year, if you see. It's been on 6,000. And therefore, there's contribution, which is the EBITDA has always also remained at the same. We've got more and more usage of material, which has gone internally. So the sales quantity has reduced. That's the reason why it's okay. But sir, volume has increased sharply. So must be there any operating leverage benefit that has not been seen in terms of higher margins? That's what I said, sir. Internal consumption has increased.

25:09 So when we talk of the margins, that is all based on the outward sales. So that has remained the same. So the margin is then getting transferred to the value added products. Secondly, on MBO business, so over here, again, the numbers are fantastic, but can you help us to understand the EBITDA growth breakdown in terms of what led to how much of EBITDA growth and margin you made as well? EBITDA, we have improved from last year. And current year also, we are going to maintain the same rate since the volumes have now picking up. And for the Odisha operations also, we are going to ramp up the production.

26:01 And for the Garcharoli also, the production is being ramped up. And as I stated in my remarks that for this logistic operation, we are converting our conventional diesel vehicle to green vehicles. So there also, are going to improve on the EBITDA. So we are pretty sure that we'll be able to maintain the EBITDA level of around 27% to 30%. So can you give more clarity because our EBITDA is about 145% year on year. So and the volume is up around around 80%. So just want to, you know, cover the bridge of, you know, what led to such high... Is there any, you know, the contracts which which is giving us the higher margins now compared to the last year. Can you just detail out something In over Odisha, this year, we are going to we have already started two new mining projects.

26:58 One is Lassada Pachiri and another we are going to start is in Dulphahar. So in both the mining contracts, we have a better EBITDA margin as compared to our other Odisha mines. So in these two, our EBITDA margins will be much, much better as compared to other mines. And also on the fuel costs and all these things, fuel efficiency, we are going to improve upon and our EBITDA would be stable as compared to the last year. And EV vehicle fuel saving, we are going to go get more due to this EV vehicles. And these two mining contracts, where the margins would be around more than 40%. So we'll be able to maintain the higher EBITDA margins. Lastly, on the consolidated level if you request that you return to question queue for follow-up. Sure. Sure. Thanks. Yeah. Thank you, sir.

27:51 The next question is from the line of Amit Dixit from GS. Please proceed with your question. Yes. Hi. Good afternoon, everyone, and thanks for the opportunity. Couple of questions from my side. First of all, congratulations for a very good set of numbers. Sir, if you could let us know the progress of BHQ plant, You mentioned in the PPT that yielded like 38%. So just wanted to understand what kind of grade we are getting now? And when is this project expected to be complete? Is there any delay or something like that, if you can comment on that? That is the first question. In BSQ, we hope to commission it by March 28 as per our renewal schedule.

28:39 The recovery of 38% against original 35% is more or less confirmed with all the tests that we've been doing on the test bench by the pilot through the pilot plant. And so the cost is also more or less within that range that we had originally assumed. Sir, what is the grade in terms of iron ore and alumina content, if you can highlight? The total gangue will be less than 3%, alumina and silica and the all the finished product and the finished product will be in range of 66%, 67% at the bare minimum. Wonderful. The second question is essentially on CapEx.

29:24 Now if I look at the CapEx, I mean, this quarter, it has, of course, increased quite a bit. Just wanted to understand the peak CapEx for the company, which year, I mean, we will be having the peak CapEx? And what is your plan for CapEx in international geographies, particularly if you want to further increase the operations in Congo, let us say? And also, if there are if there is any CapEx apart from that $300,000,000 that you mentioned in the in your opening question to Vikas, yes? So CapEx currently, as Imanko mentioned, we have for the foreign operations, are around $300,000,000 is what is planned. This should be in this financial year is what it should what would be expected.

30:11 Plus as for the ongoing projects, we should be having apart from the ISP in Konsari, we would be having around INR 8,500 crore of CapEx in this year. So we've gone down around INR 3,000 crore already in the first quarter. And then we so it should be at around INR 11,500 crores over the next three next two years. That should be the CapEx. And going forward with the steel plant coming in, it should be on a higher range. Plus we this does not include anything for the copper project in PNG, the Baghoula Mines. So we're just exploring that once that is clear and we have a clear picture on it, then we should be coming back to you.

31:08 Okay. Sure, sir. Thank you so much and all the best. Thank you, sir. The next question is from the line of Siddharth Garekar from Equirius. Please proceed with your question. Hi. So congrats on the strong set of numbers. The first question is on the India business. If I look at the production and sales volume this quarter, it seems that we had some carryforward inventory of iron ore. Can you quantify that, one? And secondly, INR $3.25 crores of cost savings on the Surrey pipeline, can we annualize that annually on a per ton basis? I didn't get your second question. Can you repeat it? So the slurry the cost saving on the slurry pipeline was around INR $3.25 crores we mentioned in the presentation. Can we annualize that savings on a per tonne basis for the full year? Yes. This strategy has mentioned it around INR 500 to INR $5.50 per tonne on the on because of the slurry line, the slurry project.

32:05 That is the saving what we are getting on the pellet costing. And to the first part of your question, we had around 1,500,000 tonnes of stock, hopefully stock of iron ore, which we would be selling out in this year. So this year, sales would be more than INR 26,000,000 with this 1,500,000 tonnes. Okay. So second, on the P and G, time lines and any initial thoughts on how much would be the investment on that project? Like both Sridhar and Hemangur have mentioned, sir, the PNG, ABG project is still under study. It's very, very pipeline safe, and it will be very difficult to hazard any guess at the moment. It's a very positive moment for the company.

32:54 We are studying it. We have our team for the exploration, for the studies, for everything, for the CSR to start with also. But and we hope to replicate what we have done in continuity, both in Chemab and in Panguna. To give figures at for Panguna at this stage is impossible. Sir, just last question on the steel plant, any changes on the steel plant CapEx and time lines of when are we expecting to start the steel plant CapEx? Which steel plant, sir? The Maharashtra steel plant we had announced. The first steel plant is already under commissioning. It's under execution. We hope to commission the plant by the end of this year, March 27.

33:43 And for the second one, the original one, which was estimated at around 3,000,000 tonnes in Konsui, we have like I mentioned last time, we have put that on the study block, studying how we can get maximum retail of the land that has already been allotted to us, already in our position. And whether we can increase our capacity in that area, given that we already have the iron ore availability and seeing that the operations are going very smoothly, we might be increasing the capacity. No decision has been yet made on that. The next question is from the line of Vinit Thakur from Plus ninety one Asset Management.

34:33 Please proceed with your question. Hi, sir. Thank you for the opportunity. And congratulations on great set of numbers. Sir, I just had question regarding the guidance for CapEx for next three years. Yes. As I just mentioned, we should be at around INR 11,000 close to INR 11,000 crores for the next two years and a bit higher around INR 15,000 to INR 20,000 crores in the year after that. So the third year. So that is what should be there. So coming to the EBITDA, the previous participant asked the same question about the EBITDA per ton. What do you think would be the next for this coming quarter, how the market has been subdued, as you said, by other players in the market as well, The prices have fallen off, pellets down and so as iron ore prices have fallen down. So do you think the results in coming few months will be depressed for pricing?

35:35 I don't count any pricing ever as depressed or bullish. It's a commodity changes with every season and every year. I believe that the average for this year quarter on quarter has been the same like last year, which is very exactly the same. I believe this year will be the same like last year. How we can improve is by placing our materials better geographically, which we are forcing our sales teams to do to ensure that we get better realizations with the same market, whatever it is. It has helped us that some of our iron ore that we were selling in longer distances can be serviced to customers need not be serviced to those customers because we will be adding value by making pellets.

36:25 So that will probably add to our long term margins, which we have seen with a 6% growth this year. We hope to continue similar results, but pricing is impossible to predict. And sir, what's the sustainable margin going forward? Sorry? What will be a sustainable margins going forward post the copper? It's a commodity, which all of you guys call cyclical. How can I predict any margin? Fair enough, sir. Thank you so much. Thank you, sir. The next question is from the line of from Integrity Ventures and Partnerships. Please proceed with your question. Hi, sir.

37:12 Just on a copper division, you mentioned you are renegotiating term loan for project. Want want to know your views on that Sorry to interrupt me, sir. Your voice is not that audible. Please, can you speak little louder? Yes. Sir, I wanted to ask on. Also, the management has mentioned that you are renegotiating the down on. So what's what's the status of the project, and what is the longer term view of the management on this project? So the terms are already negotiated. We are looking at total financial closure. The project is under active development. So I think we'll reach financial closure in the next three to four months, and we will have the firm time line on closure out of all the agreements which have been signed.

38:10 Okay. And what is the lower down view on this project? Like is the project expected to generate a significant EBITDA margins for its company level? So basically, we do have feasibility reports from the past, but I think it would be more prudent. And as we said, it's a commodity business. So it depends. I mean, if we consider current copper prices, of course, the margins are very high. But it would be a pretty early comment on what margins we'll be making. We do have a plan. We do have projections, but I think we'll be able to disclose more on that when we are confident and final commissioning time line, which I think should happen in the next three to four months.

39:05 Okay. And then this project must be contributing to the depreciation, etcetera, other expenses current in current quarter, right? Yes. So yes, the assets will were incomplete. So all the depreciation benefits will remain and will be claimed by the company, which is the company which has been acquired. So that 100% will help in the tax benefit that will come along with the assets being there. Okay. Got it. Thank you. Thank you, sir. The next question is from the line of Ritesh Bhagwati from Alpha Plus Capital. Please proceed with your question. Hi, sir. Thanks for taking my question. And first of all, congrats on great set of numbers.

39:54 My question pertains to the NTPC waiver receivable that was used as AUM in auditor's note. So right now, it stands at INR 300 odd crores, and it's still growing every quarter, like even though NTTCS walked away from the settlement two years ago. My question simply is like and I believe we have not provided anything for that yet. So what is the thought process behind that? And what would make us provide that? Like do we wait for the final cohort date? Or is there some audio trigger for that? We were not able to understand because our line is not clear, and we were just not able to understand any of your questions. Okay. So I'll just repeat it. So my question pertains to the NTPC wage variable that was raised by the auditor's note in our P and L. So it currently stands at INR 300 odd crores. And I believe NTPC has walked away from the settlement two years ago.

40:49 And somehow, I believe we have not yet provided for this INR300 odd crores in our books. Now what I want to understand is what is the thought process behind that? And what are we waiting for? Like, are we, like, on a way for the final code word date? And only then we are going to look for the provisions? Or how is it? Like No, no. We don't intend to make any provision for that. We are in negotiation with NTPC and their authorities, not only for this, but for our escalation on fuel cost and all these things also. So negotiations with NTPC are on. And hopefully, for this wages also, this matter will be sorted out because this is what they had to pay, and they have not yet paid.

41:35 In arbitration, we had won this award. And since NTPC did not go for accept the arbitration, the matter is again subjugated still now. And we are hopeful in next two, three months, NTPC matter would be resolved. Okay. Now has taking all this largest pool customer to quote affected our working relationship with them in any terms like contract renewals or anything? No, no. Because we are the largest MDO producer for NTPC and their NTPC entire power plant and everything is dependent on our MDO operation. So there is no relationship conflict between the two companies. In fact, we are their preferred MDO contractors, and we are the largest producer of coal for them. So there's nothing as such in this. And PV and in fact, they have awarded a new contract also.

42:29 There is another PV North West, which has just started production last year only. That is again of 3,000,000 tonnes. So it shows our relationship with NTPC. So there is no issue in relationship and anything with to do with all this because these are part of normal business that is the business that So both the companies are doing their own job. But yes, we are their preferred partners, and they have full confidence on us. And my next question is on our Q and Sorry to interrupt the test, sir. May we request that you return to question queue for follow-up? Okay. Fine. Thank you. Thank you, sir. The next question is from the line of from ICICI Securities. Please proceed with your question. Hi, sir. Thank you for the opportunity again.

43:17 Sir, my first question regarding you just pointed out that your CapEx would be INR 11,000 crore for each of the two year and then INR 15,000 crore. So can you just give us from which year the integrated largest deal plan CapEx would take off? And how much time now the new timelines for you to complete that the new steel plant because that would be a next leg of larger portion of the top line growth would be coming from? To reiterate, Vikashi, or little capacity plan was around 3,000,000 tons. With new technology and new experience of the Indian steel fraternity, we believe we can do a larger plant in the same location. Number one, with the confidence that the capital markets have given us as well as our success in the mining of the iron ore feed with both those factors together, we are hoping to increase our capacity, plant capacity.

44:20 Plans have not yet been finalized nor been approved by the Board. We are doing various studies, technical, commercial, financial and seeing where the capital should be allocated. Right now, there is no plan made that we can have any announcement on. Noted, sir. And just one more question regarding Pivenin. Currently, we are doing larger part of the revenue coming from our own mining contracts. So could you list two, three larger mining contracts which would come in the next two or three years which would give us a little bit of more satisfaction towards the Piveni growth hub for the third party? Himankur mentioned about the Tata contracts.

45:06 That was smaller, he said that is a smaller portion basically. We had a plan to grow the top line at 30%. So just wanted to understand from where that 30% plus 30% growth for the next two year would come? The Tata contract would be, again, hazarding a guess, would be 3,000,000 to 4,000,000 tonnes. NTPC contracts are going at around 3% to 5% growth. So are the... OMC. OMC contracts. And to this new mining, I don't know, for Dulphahar and Lessarda, this is going to add 5,000,000 tonnes and with a better margin. This year will be the full year's operation. Dollars 1,500,000 full year operation and $3,000,000 will be at least half of that to 3,000,000 we are going to increase this year apart from the normal increase in other mines.

45:56 So we are quite confident that in Odisha itself, we'll be able to achieve around 35,000,000 tons of... And apart from that, our geomaser contract is also there, which is the company not owned by Lloyds Metals, which is a group company. And there also the contracts will be worth so that's for the growth that we are predicting include all these contracts. Noted, sir. And sir, in our context, the diesel Sorry, just or the power fuel to return to question queue for follow-up. Thank you, sir. The next question is from the line of Siddharth Gadekar from Equirius. Please proceed with your question. So just one last question on the Shimath debt.

46:44 Has the restructuring of the debt completed this quarter or it will happen in the next quarter? No, it will happen in the next quarter. So there is still time line left for it. So basically, yes, we it will be completed before the time line that is due and agreed with the creditors. So part of the debts have been done, like some of the EPC contractors, they have been done and settled. But some of the other ones are pending, and they will get completed before the time line expires for them. So technically, our debt will come down by 700,000,000 to $800,000,000 on a consolidated basis after the restructuring? Yes. Once we complete the complete final closure, it depends upon how actually we are refinancing because we are still looking at complete financial closure.

47:37 So that includes taking some of the debt, which is there. So some of the new debt may replace the older debt, which is there. So yes, but there will be a significant reduction in the overall debt because that debt does include some of the accrued interest penalties, etcetera, from the past. But yes, it will come down by near about, I mean, percent to 50%. Okay. Thank you so much. Thank you, sir. The next question is from the line of Nidhi Ashwasti from Big Mint. Please proceed with your question. Good evening, sir. Many congratulations for the number, and thanks for the opportunity.

48:26 Sir, my first question is as the company ramps up their iron ore production to 26,000,000 ton and tariff production to around 8,000,000 tonne in FY 2027. What proportion of the incremental iron ore and pellet volumes will actually enter the merchant market? And what proportion will be consumed within the integrated value chain? So at the moment, I'll say, going forward to FY 'twenty eight, we'll have our 1,200,000 tonne plant commissioned. So between the iron ore and the pellet, around 2.4 tonnes 2,400,000 tonnes on a round figure basis would be consumed within the company. Out of this, right now, around 1,000,000 tonnes is being consumed.

49:11 So 1,400,000 additional will be consumed in the steel plant by FY twenty twenty eight. Beyond that, like I already mentioned, we don't want to hazard a guess regarding the bigger steel plant. Okay. And sir, my second question is, once the BHQ beneficiation plant is operational, what annual saleable output can the company expect from the planned 30,000,000 tonne capacity? Can you repeat your question, please? Once the BHQ Beneficiation Plant is operational, what annual saleable output can the company expect from the planned 30,000,000 tonne throughput capacity? So we will be putting in around 16,000,000 tonnes of output from that roughly, 16,000,000 to 17,000,000 tons depending on the yield that we get from the material.

50:06 Thank you. Thank you, sir. That's in two phases. There are basically nine modules. And once we start commissioning the modules one by one, continuously, it would be ramped up like that. Okay, sir. Thank you. Thank you, ma'am. The next question is from the line of Amesh Arda from Investment Advisors. Please proceed with your question. Hi, sir. Thank you so much for the opportunity. Just wanted to ask what is the reason for this fund raise in and Infra $6.50 crores or two fund raise they are doing, we are doing helping them? In fact, we just wanted to reduce our high cost and at the same time, we are going for CapEx capital investment, and we have to invest in our outside subsidiaries also for doing the MBO contract. So for this purposes, as I said in my opening remarks that we are converting a few of our conventional equipment to the electrical equipment. For that, we need funds.

51:10 We just wanted to replace some high cost debt also, which we have replaced. And at the same time, we are putting in funds for our overseas subsidiary, where we intend to start the mining operation. So these are the main purpose of raising the funds. And sir, can you also highlight what is the current interest cost that we are paying for this Tibaneo business? Current interest cost for this Just tell you. Yes. I just percentage like what is the interest percent? No, interest is around 9% to 9.5% is the interest. So this blended. So Q1, we had paid interest of around 115 crores. Okay. Okay. Okay. And the second question was like when do we expect the copper business to become profitable?

52:03 And what kind of margins can we expect from the same? I think, sir, this question has been raised earlier by your previous participants. I would request you to refer to the transcript later. Sure, sure. Thank you, sir. Thank you, sir. Ladies and gentlemen, in order to ensure management is able to address questions from all the participants in the conference call, please limit your question to one per participant. The next question is from the line of Angeli from Mirania Family Office. Please proceed with your question. Hi. Thank you for the opportunity. I need to ask two questions regarding this.

52:51 One was that in one of your previous conquest, you highlighted a structural savings of 4,000 per ton. Can you please provide a granular breakdown of this savings? And I also wanted to know the standard conversion ratios across our value chain from BHQ to iron ore to pallets to DRIs. And I also wanted to know about the nine fifty kilometers slurry pipeline that mentioned in your website. And how much of, like, direct shipping iron ore is left in our mind? So let... The the longer pipeline is part of the long term vision of the company and not really a financial plan at the moment. The INR 4,000 per tonne included the I don't remember the figure exactly, but 2,000 included the Triveni savings, the savings by consolidating of Triveni, the pipeline slurry pipeline saving, the savings due to fuel efficiencies, etcetera. So it was... It was a mix of everything. It was a mix of everything. I would not have the breakup of that.

53:56 But overall basis, the plan is working well within the plan that we had. And that's why you see an increase of 600 basis points or more in the EBITDA margin. And your one question, I think, this time, if you want to repeat that. Yes. It was about the conversion ratio, like from iron ore to pellets to DRIs to steel. Iron ore to pellet is around 1.07, which is much more competitive than most of our competitors because of the lesser LLOY quantum from pellet to DRI is around 1.5 roughly. And from DRI and blast furnace, there's a factor of various aspect, but I always consider two tons of iron ore per ton of steel, give or take a few percentage points within that. But that's a very complicated formula to explain right now.

54:58 I got this, but just one more thing. I Sorry, ma'am, may we request that you attend to the question queue for follow-up? Thank you, ma'am. The next question is from the line of Div Agarwal from FICCOM Family Office. Please proceed with your question. Yes. Hi, sir. Thanks for taking my question. Sir, I just wanted to know about the recent announcement that was done by the DIC government on the ban on exports of copper. So could you throw some light on the potential impact of this move on your business? So yes, I mean, DRC government has announced that. But just to give a perspective, actually, DRC has mostly been exporting cathodes. There has been very little concentrate which goes out of DRC, and it is limited to mostly some of the players with Chinese shareholders.

55:54 So in our case, both the assets will be producing final cathodes. So it does not impact us. It might impact some of the players who might have to find extension and maybe put capacity to convert to cathodes ultimately. But on our plants, it does not have any impact. Got it, sir. Got it. Next, I just wanted to know on the gross margin front. Sorry to interrupt you, sir. May we request that you return to question queue for follow-up? Sure. Thanks. Thank you, sir. The next question is from the line of from Investment in Limited. Please proceed with your question. Hello? Please. Am I audible? Yeah. Sir, my question is that the other income has increased to $1.28 crore this quarter. So what is the reason of that? Because last quarter, it was 11.21 crore.

56:48 So part of this increase is due to the IPS from the government and part of it is from interest. Okay. Thank you. Thank you, ma'am. The next question is from the line of from Seven Rivers Holdings. Please proceed with your question. Yeah. Hi. Good afternoon, sir. My my question is on. So if we exclude the captive revenue, then I think we have sequentially, there has been very sharp uptick in Triveni from almost INR 1,100 crore to INR 1,800 crore. So what kind of should we take this as a base for rest of the year and sequentially should we grow on top of this? I couldn't couldn't get your question. Please, could you repeat?

57:37 So my question is for. In if we exclude the Lloyds revenue, then sequentially between q four FY twenty six to q one FY twenty six, we have seen a pretty sharp uptick. Almost to the tune of 1,800 to 1,900 crores of revenue. So how do we see this for the rest of the year? Rest of the year, as I said, because the other two mines are going to have their full potential. And what numbers what you are saying is not fully correct. The Q1 FY 'twenty six, our revenue was INR 1,600 odd crores. And now this year is around INR 2,700 something. No, I am speaking excluding Lloyds revenue. Yes, excluding Lloyds revenue because we are going to increase our production in two mines in Odisha, scaling up the operation in other mines in Odisha.

58:32 Gold mining also is going to increase the scale up. PV coal mining also, that 3,000,000 tonnes is going to increase the full production. So we'll be ramping up our revenue in these mines also. And at the same time, Lloyds also, because this INR 26 to 55, this year, full production will be there. So there also, we'll be getting the full revenue. One more thing I would like to add to this. Many of the participants are excluding Lloyds or internal sales from the operations of Srimini. One has to understand that it's a very integral part and both are very, very much married and very, very beneficial to each other. And that is why it's a group, and that's just part of the company.

59:18 So that has to be understood that it's a very symbiotic relationship, which is beneficial. On an overall basis, one plus one and not two in this, but it is 111, not even 11. So one has to appreciate that. Ladies and gentlemen, in the interest of time, that was the last question for today. I would now like to hand the conference over to management for closing comments. Thank you very much, everybody, for your participants and for your participation and all the wonderful questions. Hope we have replied to all your questions. If you have anything else, you can get in touch with us directly. The numbers and the e IDs are all there on the website as well as in the earnings presentation. So you can just get in touch with us for any further questions.

1:00:11 Thank you, Jayshan Deep and the Nomura team also for holding this earnings call. Thank you once again to everybody. Thank you very much. Thank you. Thank you. Thank you, sir. On behalf of Lloyds Metals And Energy Limited and Nomura, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines. Thank you. Thank you. Hello.