Lloyds Metals & Energy (NSE:LLOYDSME) Q2 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to Lloyds Metals And Energy Q2 and H1 FY 'twenty seven Earnings Conference Call hosted by Anandrati, Sharon Stockbrokers Limited. This conference call may contain forward looking statements about the company, which are based on the beliefs, opinions, and expectation of the company as on date of this call. These statements are not the guarantee of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask question after the presentation conclude. I now hand the conference over to Mr. Parthir Jounsa from Anandrati. Thank you, and over to you, sir.

0:48 Thank you, Dhanesh. Good afternoon, everyone, and thank you for joining us today. Before we start the call, would like to wish the management of Lloyds Metals And Energy and everyone who has joined this call a happy Diwali in advance. We at Anandrati are pleased to host Lloyds Metals and Energy Quarter two and H1 FY 'twenty seven Earnings Conference Call. From the management, we have with us today Mr. I'm sorry to interrupt you, but your voice is breaking. From the management we have with us today, mister Rajesh Gupta, managing director mister Riyadh Sheikh, director of finance and CFO mister HK Naredi, director of finance from Triveni and Mr. Himankur, Director of International Strategy and Operations. I would like to invite Mr. Rajesh Gupta for his opening remarks, which would then be followed by question and answer session. Thank you, and over to you, sir.

1:46 Good evening, everyone, and a warm welcome, and happy Diwali for the coming week. Thank you, Pativ and the entire Anandati team for hosting this call today. I'm pleased to share that the first half of FY 'twenty seven has been the best H1 in the company history, record revenue, record EBITDA and record PAT on both the stand alone and a consolidated basis with the best ever H1 margin. Riyadh will take through the numbers in detail. So rather than dwell on this quarter alone, I would like to use my time to talk about something I feel more strongly about, where this company is headed and why I believe the best of Lloyds is still ahead of us. What we are building is a fully integrated ecosystem, the system from the ore in the ground to finished steel, from the mines of Gachori to the critical mineral belts of the world.

2:41 Let me walk you through the pieces. It begins with our original resource base that is the Surjagat Mine, which will give us iron ore for the next few decades. And we continue to scale it responsibly with a green and increasingly electrified mining fleet. But the real transformation is going to be our BSU beneficiation initiative. BSU, which are banded on emitted quartzite or low grade ore proceeded as a waste by most of the mines in India. We are building one of the largest beneficiation platforms in the world to convert this very material into a high quality competitive feedstock. This gives us a raw material advantage that very few anywhere in the world will be able to replicate and it is the foundation on which our low cost, low carbon steel ambition rests.

3:33 The second pillar is logistics. Our slabby pipeline is quietly becoming one of our biggest competitive advantage, as we can see. The first pipeline is already running at full capacity and has actually lowered our freight cost for iron ore. And we are now extending this to a much longer and larger pipeline network, which will carry our beneficial materials over long distances, eliminating the movement of fine ore by truck almost entirely. The cost in carbon advantage of moving millions of tonnes by pipeline instead of road is enormous and will only be compounded as the volumes grow. I want to touch base on our value added products, which have been the cornerstone.

4:19 On pellets, both our plants of 4,000,000 tonne each capacity are running in excess of the rated capacity. And we're debottlenecking towards higher output while adding a third power pellet plant as well. We remain among the most competitive and largest merchant producer in the country. And then comes steel, the next big leg of our value creation journey. 1,200,000 tonne integrated steel plant producing wire rod is progressing well and moving steadily towards commissioning. The next part of the story that I'm probably most excited about is copper and mineral copper and critical minerals like cobalt. Through our KEMAP operations in The DRC, where we are a shareholder with the American company.

5:11 We are willing to integrate copper and cobalt complexes at Ichthoy and Mutoshi. We come with a fully captive ore, integrated capital sulphuric acid and plants located right next to the mines. At full potential, these operations will produce 74,000 tonnes of copper and 20,000 tonnes of cobalt a year. Suriya mines is being repositioned for a lower cost restart as we secure captive higher grade ore. These are there are geopolitical headwinds, and we are addressing the near term cost challenges, but the long term logic, captive ore and in all mining through revenue expertise remains compelling. Looking ahead, our partnership at Panguna gives us access to one of the greatest world's greatest untapped copper source.

6:02 And as said with that its peak produced around 175,000 tonnes of copper every year. We are still in early days here, but we are going ahead in the Lloyds way, community first with landowners and local communities as long term partners. Putting simply, copper is transforming Lloyd from a domestic iron ore company, transitioning to steel and then finally, a relevant player in the minerals that the world needs most for energy transition. Now about Triveni. None of this would have been possible without Triveni. Triveni has become a diversified Pan India mine developer and operator, spanning iron ore, coal, manganese and now gold, and is scaling rapidly across Odisha.

6:51 And beyond this, the operation gives us premium view of happenings in the metal space. And Marilli, of course, will speak to this in details. But the trajectory and the breadth of the platform it has built remains very strong. I want to leave you with one thought. The margins we are reporting today are not one off. The results of years of patient integrated building, captive work, captive logistics, rising share of value added products and a disciplined cost control. And the pipeline that I've described, beneficiation pipelines, pellets, steel, copper, power is designed captive power is designed to keep deepening that integration and keep compounding value over time. We are not chasing volume for its own sake. We are building a business that is structurally advantaged and built to last.

7:43 Again, on the behalf of entire Lloyd Metals and Trivini family, I would like to wish all of you, our investors, Amish partners and everybody's family, a very happy and prosperous Diwali. With that, let me hand over to Riaz, who will run you through the financial performance. Thank you, Rajesh Ji. Good evening, everyone. Let me take you through our stand alone financial performance for the second quarter and first half of FY 'twenty seven. The stand alone financial performance. Revenue from operation for Q2 stood at INR 4,132 crores, up 62% year on year. For H1, revenue was INR 9,545 crores, a sharp 94% growth over last year. EBITDA for quarter two came in at INR $15.38 crores, up 83% year on year and for H1 at INR 3,658 crores, up 126% year on year. This growth was driven by higher iron ore EC limits, a faster than planned ramp up of the pellet plant and improved small jarred volumes.

8:46 PAT for quarter two was $11.12 crores, up 84% year on year and for H1 was INR 2,639 crores, up 113% year on year. The right lens is the year on year growth and the H1 picture, both of which are very strong. I want to dwell on margins because this remains a real story. Our H1 EBITDA margin came in at 38.33%, the best half year margin the company has ever reported and an expansion of five forty two basis points year on year. Our quarter two margin stood at 37.22%, up four nineteen basis points year on year. Three factors are driving this: first, the commissioning of the slurry pipeline, lower the logistics and freight cost on iron ore second, higher realizations across products strengthen the overall mix and third, more structurally, a better product mix with a higher contribution from value added products like pellet led to meaningful margin expansion.

9:47 This shift is visible in our mix. Value added products now contribute 61% of stand alone revenue and 67% of EBIT in quarter two versus 4349% a year ago. This is a structural rerating of the earnings base, not a cyclical spike. Now coming to the product wise performance, firstly, iron ore. Iron ore production was for quarter two was 3,950,000 tonnes, up 15.5% year on year, with H1 production at 10,000,000 tonnes, up 35% year on year. Sales were 2,120,000 tonnes in quarter two and seven point five nine million tonnes in H1. Realization stood at around INR $6.70 per tonne with an EBITDA of 2,082 per tonne in quarter two and INR 2,239 per H1.

10:36 Our monthly run rate remains upward of 2,000,000 tonnes. To DRI and Power, DRI sales volumes were 160.6 kilotonnes in quarter two and three hundred forty three point one kilotonnes in H1, up 81104% year on year, respectively. DRI realization stood at INR 31,040 per tonne in quarter two with an EBITDA of INR 9,231 per tonne. Power volumes were up 82% in quarter two and eighty five percent in H1 year on year. Pellets. Pellets production was 2,110,000 tonnes in quarter two and three point eight one million tonnes in H1, following the commissioning of our second pellet plant in May. Realization stood at INR 11,348 per tonne in quarter two and INR 11,520 for H1, with EBITDA of INR 4,604 and INR 4,988 per tonne, respectively.

11:33 The slurry pipeline and captive ore, coupled with strong realization, drove this robust pellet margins. Our sales mix was 71% domestic and 29% export. CapEx and net debt. The company incurred CapEx of INR 6,052 crores in H1 FY 'twenty seven as we continue to build out our downstream steel and wind fixation projects. Stand alone net debt as of 09/30/2026 stood at INR 9,316 crores, comfortable relative to the EBITDA the business is now generating even though an intensive CapEx cycle. Let me add one point at a consolidated level. Our consolidated net debt remains below INR 20,000 crores. A significant part of this pertains to the Shema acquisition, which we are actively working to renegotiate on more favorable terms based on executed settlement agreements.

12:21 Management estimates the entire Shema of debt can be settled at around $250,000,000 to $300,000,000 or less, which would bring our group net debt down meaningfully. We will keep investors informed as and when this materializes. To summarize, a record first half on revenue, EBITDA impact and our best ever H1 margins, up by 42 basis points year on year. With that, I will hand over to Naredi ji for Praveen's performance. Good evening, everyone, and thank you, Rajesh ji and Riyadh. For us, at Triveni, growth has always been about disciplined execution and getting the fundamentals right quarter after quarter. Let me take you through the Privyane's performance for Q2 and H1 FY 'twenty seven.

13:12 Financial review overall. Revenue from operation for H1 stood at INR 4,608 crores, that is up 43% year on year, with Q2 revenue at INR $19.36 crores, up 22% year on year. EBITDA for H1 came at INR $8.84 crores, up 85% year on year with margins at 19.18%, an expansion of four thirty six basis points over the last year. Cash back for H1 was INR $5.58 crores, up 116% year on year with cash back margins improving 14 basis points to 12.11%. We are actively pursuing pass through of these higher input costs to our clients, and those negotiations are currently underway.

13:59 Having said that, the half year picture remains healthy with H1 margins up four thirty six basis points year on year, and we remain focused on newer operations reach full scale utilization. Iron ore volumes, including BHQ, stood at 11,220,000 tonnes in Q2 and 30,310,000 tonnes in H1. Coal volumes from our Indian operations, including overburden, were 18,820,000 cubic meters in Q2 and 44,840,000 cubic meters in H1. Barite volume were 1,660,000 cubic meters in Q2, and gold was also 170,000 tonnes in H1. Full scale mining operations commenced at Western Hill and our FY 'twenty seven equipment mobilization plan has been completed on schedule.

14:52 We now have 88 electric equipments unit operational at the mine and a further 20 at the river siding. We have also mobilized 14 mobile crushers and 26 heavy earthmoving equipments for BHQ crushing and are mobilizing higher capacity equipment, including 5,000 ultra class dumpers and large excavators to support the enhanced production. A 100 tonne diesel dumper has already been converted to LNG hybrid operation as we build our greenfield fleet. Now Odisha coal and gold. In Odisha, the operations commenced at Tata Jorah West Manganese Mine. Also production at D. C. Jain Dulphahar Mine, which commenced in October this year. And operations are expected to begin shortly at a few of other Tata mines, namely Tata Jodha West Iron And Manganese Ore Mines, Vijaya 2 Iron Ore Mines, Tata Serinkahar Iron And Manganese Mines, Bombaybari Iron Ore And Manganese Mines and Kundban Manganese Mines.

15:59 On the coal side, at PV Northwest, we have successfully commissioned and operationalized both streams of coal handling plant, and we have also completed the rehabilitation and resettlement of three major villages during this quarter. On gold, the mining plan for the company, which was also known as Geo Messor India Private Limited, the name of which has been changed to Triveni Lloyds Swannegari Private Limited, has been approved for upper caste and underground operations for 1,500,000 tonnes per annum with a processing capacity of 1,500,000 tonnes per annum. Here, Triveni is undertaking mining operations, exploration as well as processing plant operations. So the outlook as Triveni's focus remains very clear, scale responsibly, execute efficiently and protect margins through productivity and cost optimization.

16:52 The pipeline into the second half across Garchiroli, Odisha and Coal is strong, and we are confident of sustaining both growth and profitability. Thank you, and wishing you all a very, very happy Diwali. Thank you. Thank you, team. Shall we begin with the question and answer session? Yes. Thank you. Ladies and gentlemen, we will now begin with the question and answer session. Session. Participants are request to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles.

17:46 First question comes from the line of Jayshantiv Chadda with Nomura. Please go ahead. Yeah. Hi. I hope I am audible. Thank you for the opportunity, sir. Sir, my first question is regarding the core business of iron ore. If you see your realization per ton is significantly higher than the benchmark realization that we see. So just wanted to understand this premium that you're getting over benchmark. How much of this will be sustainable, and what will be the reason that you're getting this. And and in line with that also, I wanted to understand if we if we, you know, try to back calculate the iron ore required for your pellet sponsor and and then iron ore sales. It appears the number should be higher than your production numbers. Can you just explain how is that working out?

18:39 That will be my first question. So regarding the benchmark realization, I don't think there's any specific benchmark in India. Our price of INR 6,700 reflects the quality. It's one of the best iron ore available except maybe one company. And it looks like that pricing, we it's a market which is quite open. And I wouldn't say I mean, it's a good market. So we are having a pricing system of our own. In fact, just today, had a pricing meeting. And based on the end product market as well as our stocks as order books, we decide the markets the pricing.

19:26 I think this pricing can sustain over a period quite easily. Regarding the question of overall balancing, with 26,000,000 tonnes of iron ore available for till 2051, We think we are quite well placed in terms of balancing. I think there's some miscalculation maybe at your end or something. But definitely, we are not expanding beyond our iron ore availability in downstream value unit products. Yes, sir. I largely referring to this quarter. We were doing a calculation and we found that the production should have been off around 4,500,000 tonnes, but no worries, I'll get in touch with the IR team after this call and see, you know, how calculation, you know, how I can Rainy rainy season is lesser production.

20:15 That's a business fundamental. No worries, sir. Sir, my second question is on Triveni. So Triveni has been generating close to 25, 23% of EBITDA margin. However, this quarter, that margin has dipped. Any specific reason for that dip? And should we for a longer term basis, sustainable basis, should we build the rainy at 25%, 26% EBITDA margin only? Q2 always being rainy season, it has been historically that Q2 is always low. Q2 is slightly better than Q1. But from Q3 and Q4, we scale up. So if we just see the numbers, the overall numbers of H1 and H2, it increases drastically due to rains, all the iron ore production as well as coal productions are badly hampered.

21:10 And this year, particularly in Odisha and Dharshan, both the prices, they were heavy rains. And in terms of coal also, due to this geopolitical issues or the pricing of we had to suffer a little bit. So that has also affected a little bit of profitability and EBITDA margins. But now those things, as I told in my speech that now we are having the pass on mechanism with the mine owner, NTPC. And now we are hopeful that this high cost will be absorbed, and we don't foresee any challenges in achieving the EBITDA what we have projected. Understood, sir. And if I can squeeze one more.

21:57 Yeah. Lastly, on the, you know, your expansion of steel HRC 3,000,000 ton and also, you know, your approvals are are ongoing negotiation with P and G. So if you can give us some update on that along with, sir, update on, I believe, for the 50 kt plant oxidized sulfuric oxide plant was under construction. And also in in Surya, I think JORC estimates were going on. So if you can just give us a total update on that, that would be great, sir. Jashun, you are squeezing in more than many one question. But I you are asking most of the question, which many people will ask. On the steel plant of 3,000,000 tonnes, our status is right now as follows: number one is that we have got a land acquired of around 1,200 acres number two, we have a PC, the environment clearance of 4,500,000 tonnes in hand.

22:54 Right now, we are starting out of this EC, we're only starting the power plant, which will be used for powering our beneficiation plant as well as the parent plants. So that is the only thing that we have right now started the active work on. We are studying we are giving the studies to make an overall complex study for to the Chinese. That study is getting ready. The final configuration is getting ready, and we'll decide on the exact framework of our plan, capacity as well as machinery required in the next couple of months. So that's where and I think Hemangkur is there. He'll be glad to answer the questions on the copper operations. Hemangkur?

23:46 Yes, sure. Thanks, Rajeshi, and happy Diwali to all in advance. The copper operations, basically market has been quite bullish. So I'll just update with you on the three projects and we can take more detailed questions later on, if there are any. So in terms of operations at Shemav, we are actively developing both the projects. We are confident of completing them by the end of this financial year and have them in production in FY 2028. So all the time works, etcetera, is going on. Both these plants have a dedicated sulfuric acid plant. So that's a great advantage in the current market because sulfuric acid is in shortage and has impacted a lot of miners, including our plant of Fulia mines.

24:37 Both of these have captive mines, so which means that we don't have to look at buying ore from the market. And it is fed from mines, which are within the five kilometer radius, hence great logistics advantage there. Also, have got the power allocations from the state government there. So all three raw material sources is locked in. So I think we are looking at getting it up and running in FY 'twenty eight, so that our productions can rise meaningfully. In terms of Surya mines, basically there are headwinds because the plant is operating on ore from third party market. You talked about the resources we continue drilling on the exploration licenses which are there.

25:22 I think it will take some time because is a lengthy process and it's something which we'll have to wait for entire drilling results to come for the large amount of area. I mean, the area is huge. So it will take some time for us to get there. Although, I mean, we have brought in some up, but that was done over a period of four to five years between 2015 to 2020. So we benefit from the work which has been done by the past shareholders there. But for Suria Mines, I think we are progressing, but we take some time to get to job standard. In terms of production, we have been facing challenges in terms of supply of sulfuric acid because it does not have a dedicated sulfuric acid plant. So one cost is high, second availability itself is a challenge because sulfur to sulfuric acid is one is to three.

26:13 And we are seeing a landlocked country, there are limited sulfur to sulfuric acid plants, hence they have been making a lot of money. So in fact, in between, we supply some sulfuric acid from Shema plants to Suria mines to overcome the shortage that is there. Third, because the mines are far away from the plant, it's around 70, 75 kilometers. So and diesel cost in DRC has been very high. It is like $3.2 per liter, which is almost three times of what we see in India. That is a result of West Asia crisis as well as landlocked country because to transport diesel there also is high. So given that we are having limited production because of several challenges in this regards, But we have a plan in place to kind of look at potential ways to solve that through our own or through potentially building a sulfuric acid plant as well as looking at some intermediate product transfer from Shimav.

27:16 Then coming to PNG, basically, it's very early stage. We feel confident that we have the trust of the people. I think getting to the finish line is something which we are looking at. So we are actively doing a lot of training, skilling, building trust with the people. So I think in that space, to start the operations, basically, it will take some time and finalize the agreement. So currently, are focusing upon two things only. One is working with the government on what is the right model of operation, and second, working with the people on how we develop a long term plan for inclusive growth. So that's where we are because the asset is proven, so there is no risk of proving the whole there. It is a well established asset. It's more about what is the right model and way to develop for a sustainable long term goodwill as well as inclusive growth of the society there.

28:12 Thanks. Destiny, before we close on this question, I would just like to clarify on that material balance. I guess you've missed on the opening balances of the ore what we had on the closing balance last year. So that, I think, is not taken into consideration. That's why you that material balance is not mean. I think your numbers are not getting matched. Our next question comes from the line of Siddharth Gadekar with Equities Securities. Please go ahead. Hi, sir. Good afternoon. So the first question is on the Shinnaf debt. So when do we expect the restructuring of that debt to be completed? So we are looking to hire monthly. So we are looking to close it within the next three to four months. So before before the end of this financial year, it will be done.

29:05 So effective net debt would be around $250,000,000 in Shimav or below that? No. So there are two parts to it. Basically, one is an existing historical debt, which is the past creditors. And also, we are looking at some debt from U. S.-backed parties. So net debt in the longer run-in the asset will be somewhere around $500,000,000 from the current levels of around $800,000,000 And this includes the CapEx incurred for the plants because we are also spending money to complete the plants. So it includes the debt taken for completing those plans.

29:51 So... From a consolidation perspective, we are consolidating the entire debt, but active duty to bill to Lloyd would be only 49%. Is that understanding right? Yes. That is correct. So, actually, consolidation wise, it will be consolidated full because of the control provisions. So which means that P and L will also be consolidated full, but yes, 51% of the profitability will be going out as minority interest. Okay. Got it. So second question is on the India operation. We have spoken about the debottlenecking of pellets of the wire rod capacity coming online in fourth quarter and beneficiation coming online next year. So any sense on volume? How should we see the volumes for next year in these three segments?

30:39 Our volumes would be similar. We would be adding the 20% add on, the 9,600,000 tonne that should get it should become from 8,000,000 to 9,600,000 within the next three, four months. This year, our volume should touch above 8,000,000 tonnes. And next year should be around 9,500,000 tonnes. And on fire load utilization for next year? Fire load utilization, we are in the stages of pre commissioning right now. Blast furnace and Cocoa one should get started in Q4. And steel plant and wire rod will get started in Q1 twenty twenty seven, delayed by the quarter or so, the steam plant particularly, but it's a huge plant. And I think within two years of the EC, we would have commissioned this plant. It's more or less a greenfield plant like you know.

31:41 And lastly, just on beneficiation, should we expect some beneficiation volumes coming in next year or it will be FY 'twenty nine where you should see those volumes? FY 'twenty nine. Volumes of iron ore remains at 26,000,000 tons throughout the period. Yes. Usable iron ore will remain at 26,000,000 tons. The benefits will start in 'twenty nine. And just one last thing on the BH2 that we are mining. So we are keeping it aside to use it as and when the verification capacities come online. Is that a fair understanding? Not only taking aside to use it in the future, but also to assist in the mining of this 26 meters that we are doing every year. Okay.

32:26 Got it. Thank you so much. Thank you. Next question comes from the line of Manu Gogia with Adithibulla Institutional Equities. Please go ahead. Yes. Hi. Very good evening, and thank you for the opportunity. So my first question is from Mr. Nareedi. Can you just throw some light once more on the MDO with Tata Steel? And if you could just give us how the volumes and the timelines will look? And what is the expected MDO per tonne from the same? With Tata Steel, in fact, we are not directly doing the FDO business. They have Tata Steel has a company, BRPL, Brammer River Pallets, where Tata Steel and Lloyds Metals are joint venture partners.

33:18 And BRPL is going to give us a contract mining contract. There are certain mining leases of Tata Steel, which are getting expired in 2030. So they just wanted to scale up the production. And these mines, what I stated in my initial discussion that they are giving us these mines, scale up the production, and we are expecting that at least 12,000,000 to 14,000,000 tonnes of iron ore and around 1,500,000 to 1,800,000 tonne of manganese will be able to do the production from next year onwards. The negotiations are on. The rates have not yet been finalized, but we are in the advanced stage. And hopefully, very soon, we'll start it. Recently, we have just started one mine that Tata Jota West mine that we have started, where we have started doing some small quantity of manganese.

34:07 And hopefully from next month onwards or say December onwards, these things will start. Understood, sir. And at the current mine, how would the end year per ton would be shaping up if you could give some sense to it? Because this is very many scale, so we are not in a position to give you the value amount because now we are in the process of mobilizing the equipments and all those things are there. So maybe the next quarter, we'll be in a better position to give you the proper outline that how much we are going to get out of Understood, sir. That is helpful. The second question is on the copper front. So in the presentation, it basically mentions that there are some challenges with the shortage of high grade ore, the feed from your own mine. Just wanted to, you know, see your view on how are you going to tackle such a situation in the near term because, you know, your long term aspiration depend on the captive ore where you want to have it. And what what should we look from a realistic grade of copper at your mines? Because, you know, there's usually a deviation when it comes to the ore grade between the studies done and how the actual one usually come out.

35:26 Hey, Marco. Hello? Yeah. So, see, if you have got resource established, which means that it is very extensive drilling, so probably... I mean, just to get, I mean, you would understand or should be able to relate to the Sotagar asset. So I think when we started, we were not confident of what grade it will be because initial grade will be there. But once you do drilling, which means that it's a very scientific methodology, you know which segment every one cubic meter is what grade. So then you maintain multiple stockpiles and you decide on the what particular grade is to be fed. So there are certain portions which will be high grade, certain portions which are low grade. So maintain different stockpile of high grade, low grade, then you create the blend, you know what blend.

36:15 So it's a very scientific methodology. Hence, whatever is proven results, there is very little deviation that you would expect on mining it because it's already, like, proven with a very high level of accuracy. So we we can basically make an assumption that whatever challenges we are getting right now is probably a little short lived, and those will be overcome quite easily. Right? No. Yeah. Yeah. So so let me just correct. Possibly, the challenge in the case of Surya Mines I mentioned is primarily because the ore is coming from other parties.

37:00 So which means that the large part of the profit will be captured with the mine owner. It is something similar to you can say like a steel plant or an iron ore provider. So iron ore mining margin will remain with iron ore miner. Steel will be a conversion business. So basically, it will be like that. So and we don't have the established results, although we are completing and in the process of doing the drilling, but it will take some time to evaluate that and finish it. But yes, until we have captive ore, basically, you will be dependent more on the market. Once you have captive ore, then effectively which means that effectively mining margin gets combined with the processing margins. And Mr. Govir, to add to Imakur's answer, Suria Mines is around 12,000 tonnes targeted production, whereas the Itoy Land, Utoshi Mines are around 75,000 tonnes of production targeted in copper, plus 20,000 tonnes of cobalt. So as a percentage, as what Lloyds owns, it's around 12 out of 87 where we are having this small problem.

38:14 Got it. Got it. That is quite helpful. Just one last question, sir. If you could give me the targeted CapEx for FY 'twenty seven and 'twenty eight as well. I think we did INR 6,000 crores in the first half. INR 6,000 crores in the first half. We should be doing a similar with not less, but something more in the second half. So it should be around INR 13,000 odd crores in this whole year. We look at a similar figure in the next year also. And then we, as Rajeev had mentioned about the fee plan, what is bigger of fee plan coming up, then the majority will accordingly will be worked on on that. So it will be around again and again, around close to INR 10,000 or more in that in the year 2018 also.

39:03 Understood. Thank you so much. All the very best. You. Our next question comes from the line of with ICIC Securities. Please go ahead. Good evening, sir. Thank you for the opportunity. Sir, just wanted to understand in terms of our capital allocation policy since we are pursuing multiple geographies as well as multiple products, sir. In terms of look ativeness, could you just rank them that the most lucrative opportunity to the least one? And what are the CapEx which we are going to spend in the next three three year on individually copper, two, three, Vini and then the domestic, we know, basically?

39:52 I think each business in itself is quite lucrative by any standard. If you look at mainly, which is a service business and a steady business, we are having around in H1, are having EBITDA margin of around 18% and should be more for the full year like last year, which is the least EBITDA accretive. But at the end of the day, it is still a very, very steady business. The copper business, depending on the pricing, if we make today that $14,500 is obviously very, very price effective at the EBITDA as well as PAT level. And so is iron ore and steel.

40:42 And each of the processes that we look at internally are EBITDA accretive. We don't look at only from the start to the end, but each level, we have to have the value addition to be able to qualify for capital allocation. For example, now we are putting money into power because power rates by the government are pretty high, and we are trying to lower our overall costs. So the revenue may not come from outside, but our cost will be lower. We are looking at solar power, again, to continue on the same theme to reduce our cost as well as, of course, to be green. So that's the basic logic in terms of figures. I think I have it's very difficult to define which one is the most and which is the least because it's a cyclical business, and it does change from time to time.

41:43 Participants have left the queue. Our next question comes from the line of Ritesh Bhaguti with Alpha Plus Capital. Please go ahead. Congrats on good set of numbers. My first question is towards our copper targets. So on Slide 15 in our presentation, we have you know, targeted copper production at 8,000 to 10,000 tons for full year FY '27. However, on Slide 20, I see under the road to road ramp up, we are talking about FY twenty seven at five eight five zero tons. So I just want to understand exactly what is the real FY 'twenty seven targets for the copper? Yes. Let me clarify that. So I think five thousand eight fifty is the target that we are looking for the full year. So in fact, earlier when we had disclosed in the last quarter, the target was higher at 8,000 tons.

42:42 But given the challenges that we are having in Surya, a large part of the effort is going towards completing the Shemak plant because ore is coming from Shemak to its own mines. And hence, we are looking at slightly lower target than what we had anticipated earlier because the incremental margin in just a processing business sourcing third party ore is in the current market less lucrative. Hence, we are not looking at ramping it up fully. So we may be looking at some cost optimizations there before we go to full production. Okay. That makes sense. Secondly, like we have also mentioned that we are planning for $300,000,000 of NCDs to be raised.

43:30 But then however, the purpose is not yet clear. So what would it be used for if you could get over it? That's an enabling resolution what we have taken. So we just wanted to keep ourselves ready if such an opportunity arises, and we already have this decision in place, and we can go ahead with it. But and everything will be used more and more for CapEx or that's what my intention is. Next question comes from the line of with Integrity Venture and Partnerships. Please go ahead. Yeah. Hi. Am I audible? Yes. Yes. Yeah. Yeah. So I think I might have mentioned on the came up to that that side that you have answered.

44:19 I... So we have... Currently, we have an $800,000,000 of debt, and in the PPT, it did mention that same will be cleared around into $50,000,000 or something. And then you have mentioned that there will be a $500,000,000 that's still after this discussion as well. So can you please clarify again on this part? Yes. 100%. So basically, as I mentioned, we are also incurring CapEx. And for incurring that CapEx ultimately, initially, it is funded through our investment. But ultimately, we are looking at raising debt from The US Party, some of the very well known investors as well as some of the multilateral institutions.

45:06 So if that is coming in, basically, it will it will increase the debt in the company, but it will create more cash in the books for us. So yes, at such a half level, the long term debt will be around $500,000,000 which includes the debt for completing the plants and the CapEx for completing plants and settlement of the past outstanding creditors. Okay. Got it. Got it. Thank you so much. Thank you. Next question comes from the line of Mehul Panjwani with 40¢. Sir, I have one question regarding the debt and the borrowings.

45:54 So, you know, which approximately about 18,100 crores of you at CWIP already and our borrowings at 22,500 crores. And we have further investments planned in the thermal power plant and CVNE. So how should we look at the funding requirements over the next two, three years? I can get your number because the debt, what we are doing is around INR 9,500 crores of borrowing what the company has on a stand alone basis. So that numbers, you mentioned of INR 25,000 crores is something what we have actually, if you're all talking from the credit rating aspect, then it is something what we have planned for the future projects also, and we have got all those things related together.

46:44 So that's how that number is. Otherwise, all our projects, we would obviously look at some at reasonable because of less than 75%, around 65% of debt to equity. And that is how we have planned for all our CapEx. Okay. And sir, so what is the do we plan to reduce debt in the coming I mean, by the next financial year or so? I mean, because our debt is quite high. Debt is not high, as we would say. It would be like on a reasonable level, considering the income what the company is generating, the expansion, the projects what we are undertaking.

47:30 So our debt is not on the in that level, it is not on high. It's very much within 1x and or what we are trying is always 1.5x of the few of the coming twelve months EBITDA. So we keep our debt accordingly. So that's the plan. We don't and yes, once the projects start coming up and then once the are starting, then obviously, that reduces us for the repayment. Right, sir. Sir, thank you. And what would be our... Can I add point in this, when it is about CapEx, all this CapEx is paying off every two years, two point five years, our top line is becoming our bottom line, okay, including this quarter including this half year, if we look at two years past record, our top line is our bottom line is more than that year's top line? So with that kind of growth, sustainable growth, profitable growth, the numbers may look high as a stand alone absolute figure.

48:48 But by any financial parameter, it is quite well under control. Right, sir. Sir, my another question is about the profitability. Q2, as we see, it has witnessed a sharp decline in mining segment from mining segment and also the $380. So can you please elaborate on what what has led to the deterioration? I think this question was answered earlier. Sorry. I joined a bit late. Yeah. Sorry. So there is a presentation also. Basically, in the rainy season, we have lesser output. Costs remain the same, especially in the Rimini segment. Costs remain the same, and that's the main reason. If you look at H1 this year versus H1 last year, our margins are better by around 200 basis points.

49:40 400 basis points, I'm sorry. I'm just trying to find the slide. So it is continuing in a positive way. It's difficult to again, with the growth, the overheads are there, the income doesn't start immediately. Okay. So every Q2 for us is normally generally weak, is it? I mean because of months. Every Q2 is weak due to rainy season. And this Q2 particularly due to the geopolitical when the prices of it has been exposed went up. So the profitability got a extra hit. But overall, now these are being passed through. And from always but this has been a historical that Q2 is always weaker as compared to other quarters. And this means a classic hedge operation, Q2 of Lloyds Metals does not necessarily become weak compared to other quarters to that extent. So it actually hedges our overall process.

50:38 No. Sorry, can you repeat? I didn't get this one last one, what you mentioned. Q2 in this year, our EBITDA margin is 37% in Lloyds Metals stand alone. Yes. Our H1, H2 margin is also 38. So that remains steady. Yes. And that's what we keep saying that Trivini becomes a classic hedge operation with annuity business, I should not call it, he will not like it, but it's a steady business. And that's the way the cash flow flows. Right. So sir, can we expect H2 to be superior quite strong compared to H1? Our volumes in Lloyds Metals will go up for sure. Our volumes in the MBO will go up.

51:25 Our copper operations, we have discussed that in this year would be slower in H2. I leave alone I leave the rest of the calculation to you guys. Right hand side, what? Sorry? Sorry? The operation will also be very strong. Right. Sir, hypothetically, if the war was not in... Was not there in the entire h one, you would have reported a far superior numbers? I cannot go into hypotheticals like that, my friend. No. I mean, just... I'm not looking at any quantification, but just as a wars wars and violence helps no one. That's my fundamental thinking. And looking at equating a theoretical thing with financials is beyond my core of understanding and explanation.

52:19 Thank you. Our next question comes from the line of Parthiv Johnson with Anandrati, Sharon Stockbrokers. Please go ahead. Yes. Hi. Thank you for the opportunity. Sir, I'm just it's a bit fundamentally different question. It's pertaining to the Bogenville, actually. Considering Bougainville is still autonomous government. Right? And the target what you have laid down is quite cheap. I believe it's, like, about one lakh 75,000 tons of copper on an annualized basis. By when... Because I believe it's still a couple of quarters down the line when they'll get complete independence and everything. So by when can we start building in this number of copper, the very first ounce, we will take? No, no. My opening statement was not about what our target is. My opening statement is what was being produced forty years back in that operation. Okay. Okay. Okay. So I have not made any target. We have not signed any contract.

53:13 Let's not jump ahead. We have no projections for P and C. Okay. Okay. But if we just put back of the envelope calculation, considering the grade, I think it even has a gold content generator, if I'm not mistaken. What can we look into it? How fast? It's very, very early days to quantify any operations, volume, value, content of that operation at the moment. Okay. Okay. Yes, I just had this one question, sir. Thank you so much. Thank you so much. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for the closing remarks. Thank you and over to you, team. Yes.

53:58 Thank you very much, gentlemen, for joining us for the update on the second second quarter two and the first half of the company. And wishing you all a very happy Diwali. Hope we have all answered all your questions and to your satisfaction. If anything else remaining, anything pending, you can always get in touch with us. So we'll be happy to share and give you all the replies and the answers to your questions. Happy Diwali once again. So and thank you very much to the Anand Rathi team for hosting this conference. Happy Diwali to everyone and to Parthiv and the Anand Rathi team. Thank you so much, sir. Ladies and gentlemen, on behalf of Anand Rathi, Sharon Stockbrokers Limited, that concludes today's call. Thank you for joining us and you may now disconnect your lines.