Ladies and gentlemen, good day and welcome to Lloyds Metals And Energy Q2 and H1 FY 2027 earnings conference call hosted by Anand Rathi Share and Stock Brokers Limited. This conference call may contain forward-looking statement about the company, which are based on the beliefs, opinions, and expectation of the company as on date of this call. These statement are not the guarantee of future performance and involve risk and uncertainties that are difficult to predict. As a reminder, all participant line will be in the listen-only mode and there will be an opportunity for you to ask question after the presentation conclude. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. I now hand the conference over to Mr. Parthiv Jhonsa from Anand Rathi. Thank you and over to you, sir.
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 Anand Rathi are pleased to host Lloyds Metals And Energy quarter two and H1 FY 2027 earnings conference call. From the management, we have with us today Mr. Rajesh Gupta, Managing Director, Mr. Riyaz Shaikh, Director of Finance and CFO, Mr. S. K. Naredi, Director of Finance from Thriveni, and Mr. Hemankur , Director, 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.
Good evening, everyone, and a warm welcome and happy Diwali for the coming week. Thank you, Parthiv, and the entire Anand Rathi team for hosting this call today. I am pleased to share that the first half of FY 2027 has been the best H1 in the company history, record revenue, record EBITDA, and record PAT on both the standalone and the consolidated basis, with the best ever H1 margin. Riyaz 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, from the ore in the ground to finished steel, from the mines of Gadchiroli to the critical mineral belts of the world.
Let me walk you through the pieces. It begins with our original resource base, that is the Surjagarh 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 BHQ beneficiation initiative. BHQ, which are banded hematite quartzite, or low-grade ore, was treated 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. The second pillar is logistics.
Our slurry 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 substantially lowered our freight cost for iron ore. We are now extending this to a much longer and larger pipeline network, which will carry our beneficiated materials over long distances, eliminating the movement of fine ore by truck almost entirely. The cost and carbon advantage of moving millions of tons by pipeline instead of road is enormous, and it will only be compounded as the volumes grow. I want to touch base on our value-added products, which have been the cornerstone. On pellets, both our plants of 4 million ton each capacity are running in excess of the rated capacity, and we are debottlenecking towards higher output while adding a third pellet plant as well.
We remain the most competitive and largest merchant pellet producer in the country. Then comes steel, the next big leg of our value creation journey. 1.2 million ton integrated steel plant producing wire rod is progressing well and moving steadily towards commissioning. The next part of the story that I am probably most excited about is copper and critical minerals like cobalt. Through our Chemaf operations in the DRC, where we are a shareholder with an American company, we are building two integrated copper and cobalt complexes at Etoile and Mutoshi. They come with a fully captive ore, integrated captive sulfuric acid, and plants located right next to the mines. At full potential, these operations will produce 74,000 tons of copper and 20,000 tons of cobalt a year. Surya Mines is being repositioned for a lower-cost restart as we secure captive higher-grade ore.
There are geopolitical headwinds, and we are addressing the near-term cost challenges, but the long-term logic, captive ore, and in-house mining through Thriveni expertise remains compelling. Looking ahead, our partnership at Panguna gives us access to one of the world's greatest untapped copper source, an asset that at its peak produced around 175,000 tons 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 Lloyds from a domestic iron ore company, transitioning to steel, and then finally, a relevant player in the minerals that the world needs most for its energy transition. Now about Thriveni. None of this would have been possible without Thriveni.
Thriveni has become a diversified pan-India mine developer and operator, spanning iron ore, coal, manganese, and now gold, and is scaling rapidly across Odisha. Beyond this, the operation gives us premium view of happenings in the metal space. Naredi, 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. They are results of years of patient integrated building, captive ore, captive logistics, rising share of value-added products, and a disciplined cost control. The pipeline that I have described, beneficiation, pipelines, pellets, steel, copper, power, 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. Again, on the behalf of entire Lloyds Metals and Thriveni family, I would like to wish all of you, our investors, analysts, partners, and everybody's family, a very happy and prosperous Diwali. With that, let me hand over to Riyaz, who will run you through the financial performance.
Thank you, Rajesh ji. Good evening, everyone. Let me take you through our standalone financial performance for the second quarter and first half of FY 2027. The standalone financial performance, revenue from operation for Q2 stood at INR 4,132 crore, up 62% year-on-year. For H1, revenue was INR 9,545 crore, a sharp 94% growth over last year. EBITDA for quarter two came in at INR 1,538 crore, up 83% year-on-year, and for H1 at INR 3,658 crore, 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 sponge iron volumes. PAT for quarter two was INR 1,112 crore, up 84% year-on-year, and for H1 was INR 2,639 crore, 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 the 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 542 basis points year-on-year. Our quarter two margin stood at 37.22%, up 419 basis points year-on-year. Three factors are driving this. First, the commissioning of the slurry pipeline lowered the logistics and freight cost on iron ore. Second, higher realizations across products strengthened 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. This shift is visible in our mix. Value-added products now contribute 61% of standalone revenue and 67% of EBIT in quarter two, versus 43% and 49% 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 for quarter two was 3.95 million tons, up 15.5% year-on-year, with H1 production at 10 million tons, up 35% year-on-year. Sales were 2.12 million tons in quarter two and 7.59 million tons in H1. Realization stood at around INR 670 per ton, with an EBITDA of INR 2,082 per ton in quarter two and INR 2,239 for H1. Our monthly run rate remains upward of 2 million tons. To DRI and power, DRI sales volumes were 160.6 kt in quarter two and 343.1 kt in H1, up 81% and 104% year-on-year respectively. DRI realization stood at INR 31,040 per ton in quarter two, with an EBITDA of INR 9,231 per ton. Power volumes were up 82% in quarter two and 85% in H1 year-on-year.
Pellets. Pellets production was 2.11 million tons in quarter two and 3.81 million tons in H1, following the commissioning of our second pellet plant in May. Realization stood at INR 11,348 per ton in quarter two and INR 11,520 for H1, with EBITDA of INR 4,604 and INR 4,988 per ton respectively. 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 crore in H1 FY 2027, as we continue to build out our downstream steel and beneficiation projects. Standalone net debt as on September 30th, 2026 stood at INR 9,316 crore, 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. A consolidated net debt remains below INR 20,000 crore.
A significant part of this pertains to the Chemaf acquisition, which we are actively working to renegotiate on more favorable terms based on executed settlement agreements. Management estimates the entire Chemaf debt can be settled at around $250 million-$300 million 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, and PAT, and our best-ever H1 margins of 542 basis points year-on-year. With that, I will hand over to Naredi ji for Thriveni's performance.
Good evening, everyone, and thank you, Rajesh ji and Riyaz. For us at Thriveni, growth has always been about disciplined execution and getting the fundamentals right quarter after quarter. Let me take you through the Thriveni's performance for Q2 and H1 FY 2027. Financial review overall. Revenue from operation for H1 stood at INR 4,608 crore, that is up 43% year-on-year, with Q2 revenue at INR 1,936 crore, up 22% year-on-year. EBITDA for H1 came at INR 884 crore, up 85% year-on-year, with margins at 19.18%, an expansion of 436 basis points over the last year. Cash PAT for H1 was INR 558 crore, up 116% year-on-year, with cash PAT margins improving 410 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.
Having said that, the half-year picture remains healthy, with H1 margins up 436 basis points year-on-year, and we remain focused on newer operations reach full-scale utilization. Iron ore volumes, including BHQ, stood at 11.22 million tons in Q2 and 30.31 million tons in H1. Coal volumes from our Indian operations, including overburden, were 18.82 million cubic meters in Q2 and 44.84 million cubic meters in H1. Baryte volume were 1.66 million cubic meters in Q2, and gold was also 0.17 million tons in H1. Full-scale mining operations commenced at Western Hill, and our FY 2027 equipment mobilization plan has been completed on schedule. We now have 88 electric equipments unit operational at the mines and a further 20 at the railway siding.
We have also mobilized 14 mobile crushers and 26 heavy earth-moving equipments for BHQ crushing and are mobilizing higher-capacity equipment, including EH5000 ultra-class dumpers and large excavators to support the enhanced production. A 100-ton diesel dumper has already been converted to LNG hybrid operation as we build our green fleet. Now, Odisha coal and gold. In Odisha, the operations commenced at Tata Joda West Manganese Mines. Also, production at D.C. Jain Dalbahar Mines, which commenced in October this year, and operations are expected to begin shortly at a few of other Tata Mines, namely Tata Joda West Iron and Manganese Ore Mines, Vijay-II Iron Ore Mines, Tata Tiringpahar Iron and Manganese Mines, Bamebari Iron Ore and Manganese Mines, and Kondabali Manganese Mines.
On the coal side, at PB North West, 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 erstwhile known as Geomysore Services India Private Limited, the name of which has been changed to Thriveni Lloyds Swarnagiri Private Limited, has been approved for opencast and underground operations for 1.5 million tons per annum, with a processing capacity of 1.5 million tons per annum. Here, Thriveni is undertaking mining operations, exploration, as well as processing plant operations. So the outlook, as Thriveni's focus remains very clear, scale responsibly, execute efficiently, and protect margins through productivity and cost optimization. The pipeline into the second half across Gadchiroli, 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?
Yep.
Thank you. Ladies and gentlemen, we will now begin with the question- and- answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. First question comes from the line of Jashandeep Chadha with Nomura. Please go ahead.
Yeah, hi. I hope I am audible. Thank you for the opportunity, sir. My first question is regarding the core business of iron ore. If we see your realization per ton is significantly higher than the benchmark realization that we see. 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? In line with that also, I wanted to understand if we try to back-calculate the iron ore required for your pellets, sponge iron, 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? That will be my first question.
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 ores available, except maybe one company, and it reflects that pricing. It's a market which is quite open, and I wouldn't say it's a good market, so we are having a pricing system of our own. In fact, just today we had a pricing meeting, and based on the end product market as well as our stocks and order books, we decide the pricing. I think this pricing can sustain over a period quite easily. Regarding the question of overall balancing, with 26 million tons of iron ore available 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-added products.
Yes, sir. I was largely referring to this quarter. We were doing a calculation, and we found that the production should have been up around 4.5 million tons. No worries, I will get in touch with the IR team after this call and see how calculation, how I can—
Rainy season is lesser production. That is the basic fundamental.
No worries. Sir, my second question is on Thriveni. Thriveni has been generating close to 25%, 23% of EBITDA margin. However, this quarter, that margin has dipped. Any specific reason for that dip? Should we, for a longer-term basis, sustainable basis, should we build Thriveni 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. If you 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. This year, particularly in Odisha and Jharkhand, both the places, there were heavy rains. In terms of coal also, due to these geopolitical issues for the pricing of HLC and HOC, we had to suffer a little bit. That has also impacted a little bit of our 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 do not foresee any challenges in achieving the EBITDA what we have projected.
Understood, sir. And if I can squeeze one more?
Yeah.
Largely on the expansion of steel HRC, 3 million ton, and also your approvals or ongoing negotiation with PNG. So, if you can give some update on that, along with, sir, update on Chemaf, I believe, for the 50 kt plant, oxidized sulfuric oxide plant was under construction. And also in Surya, I think JORC estimates were going on. So, if you can just give us a total update on that would be great, sir.
Jashandeep, you are squeezing in more than many one question, but you are asking most of the question which many people will ask. On the steel plant of 3 million tons, 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 the environment clearance of 4.5 million tons in hand. 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 pellet plants. So, that is the only thing that we are right now started the active work on. We are studying, we are giving the studies to make a overall complex study to the Chinese. That study is getting ready.
The final configuration is getting ready, and we will decide on the exact framework of our plant capacity as well as machinery required in the next couple of months. That is where, and I think Hemankur is there. He will be glad to answer the questions on the copper operations. Hemankur?
Yeah, sure. Thanks, Rajesh ji. Happy Diwali to all in advance. Copper operations, basically market has been quite bullish. I will just update quickly on the three projects, and we can take more detailed questions later on, if there are any. In terms of operations at Chemaf, 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. All the time works, et cetera, is going on. Both these plants have a dedicated sulphuric acid plant, so that is a great advantage in the current market because sulphuric acid is in shortage and has impacted a lot of miners, including our plant of Surya Mines.
Both of these have captive mines, which means that we do not have to look at buying ore from the market, and it is fed from mines which are within the 5 km radius, hence a great logistics advantage there. Also, we have got the power allocations from the state government there. All three raw material sources is locked in. I think we are looking at getting it up and running in FY 2028, 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 JORC resources. We continue drilling on the exploration licenses which are there. I think it will take some time because JORC is a lengthy process, and it is something which will have to wait for entire drilling results to come for the large amount of area.
I mean, the area is huge. It will take some time for us to get there. Although, we have JORC in Shama, but that was done over a period of four to five years between 2015- 2020. We benefit from the work which has been done by the past shareholders there. But for Surya Mines, I think we are progressing, but we will take some time to get to JORC standard. In terms of production, we have been facing challenges in terms of supply of sulphuric acid because it does not have a dedicated sulphuric acid plant. One, cost is high. Second, availability itself is a challenge because sulfur to sulphuric acid is 1:3 . DRC being a landlocked country, there are limited sulfur to sulphuric acid plants, and they have been making a lot of money.
In fact, in between, we supplied some sulphuric acid from Chemaf plants to Surya Mines to overcome the shortage that is there. Third, because the mines are far away from the plant, it is around 70-75 km. So, and diesel cost in DRC has been very high. It is like $3.2 per liter, which is almost 3x of what we pay in India. That is a result of West Asia crisis as well as landlocked country because to transport diesel there also is high. 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 ore, through potentially building a sulphuric acid plant, as well as looking at some intermediate product transfer from Chemaf. Then coming to PNG, basically it is very early stage.
We feel confident that we have the trust of the people. But I think getting to the finish line is something which we are looking at. We are actively doing a lot of training, skilling, building trust with the people. I think in that phase, to start the operations, basically it will take some time and finalize the agreement. Currently, we are focusing upon two things only. One is working with the government on what is the right model of operations, and second, working with the people on how we develop a long-term plan for an inclusive growth. That is where we are, because the asset is proven, so there is no risk of proving the ore there. It is a well-established asset.
It is 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. Yeah, thanks.
Jashandeep, before we close on this question, I would just like to clarify on the material balance. I guess you missed on the opening balances of the ore what we had as a closing balance last year. That I think is not taken into consideration. That is why that material balance does not mean I think your numbers are not getting matched.
Thank you. Next question comes from the line of Siddharth Gadekar with Equirus Securities. Please go ahead.
Hi, sir. Good afternoon. The first question is on the Chemaf debt. So when do we expect the restructuring of that debt to be completed?
We are looking to— Hi, Hemankur. Yeah. We are looking to close it within the next three to four months. So before the end of this financial year, it will be done.
So, sir, effective net debt would be around $250 million in Chemaf or below that?
No. There are two parts to it. Basically, one is an existing historical debt, which is the past creditors. Also, we are looking at some debt from U.S.-backed parties. Net debt in the longer run in the asset will be somewhere around $500 million from the current levels of around $800 million. This includes the CapEx incurred for the plants, because we are also spending money to complete the plants. It includes the debt taken for completing those plants.
From a consolidation perspective, we are consolidating the entire debt, but attributable to Lloyds would be only 49%. Is that understanding right?
Yes, that is correct. Actually, consolidation-wise, it will be consolidated full because of the control provisions. Which means that P&L will also be consolidated full, but 51% of the profitability will be going out as minority interest.
Okay. Got it. Second question is on the India operation. We have spoken about debottlenecking of pellets, the wire rod capacity coming online in fourth quarter, and beneficiation coming online next year. Any sense on volumes? How should we see the volumes for next year in these three segments?
Volumes would be similar. We would be adding the 20% add-on, the 9.6 million ton. It should become from 8- 9.6 million within the next three, four months. This year, our volume should touch above 8 million tons, and next year should be around 9.5 million tons.
On bio-ore utilization for next year?
Bio-ore utilization, we are in the stages of pre-commissioning right now. Blast furnace and Coke Oven should get started in Q4, and Steel Plant and Wire Rod Mill should get started in Q1 2027. It's delayed by a quarter or so, the Steel 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.
Lastly, just on beneficiation, should we expect some beneficiation volumes coming in next year, or it will be FY 2029 where we should see those volumes?
FY 2029.
Okay.
Volumes of iron ore remains at 26 million tons throughout the period.
Yes.
Deliverable or usable iron ore will remain at 26 million tons. The beneficiation benefits should start in 2029.
Just one last thing on the BHQ that we are mining. We are keeping it aside to use it as and when the beneficiation 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 million tons that we are doing every year.
Okay. Got it. Thank you so much.
Thank you. Next question comes from the line of Manav Gogia with Aditya Birla Institutional Equities. Please go ahead.
Yeah, hi. Very good evening, and thank you for the opportunity. So my first question is from Mr. Naredi. 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 ton from the same?
With Tata Steel, in fact, we are not directly doing the MDO business. Tata Steel has a company, BRPL, Brahmani River Pellets, where Tata Steel and Lloyds Metals are joint venture partners. BRPL is going to give us the contract, mining contract. There are certain mining leases of Tata Steel which are getting expired in 2030. 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 to scale up the production, and we are expecting that at least 12 million-14 million tons of iron ore and around 1.5 million-1.8 million ton of manganese, we 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 will start it.
Recently, we have just started one mine, that Tata Joda West Mine, that we have started, where we have started doing some small quantity of manganese. Hopefully from next month onwards or say December onwards, these things will start.
Understood. At the current Joda West Mine, how would the MDO per ton would be shaping up, if you could give some sense to it?
Because this is very mini scale, so we are not in a position to give you the value or—
Understood.
—the amount, because now we are in the process of mobilizing the equipments, all those things are there. Maybe the next quarter we will be in a better position to give you the proper outline that how much we are going to get out of this.
Understood. That is helpful. The second question is on the copper front. In the presentation, it basically mentions that there are some challenges with the shortage of high-grade ore, the feed from your own mines. Just wanted to see your view on how you are going to tackle such a situation in the near term, because your long-term aspirations depend on the captive ore where you want to have it. What should we look from a realistic grade of copper at your mines? There is usually a deviation when it comes to the ore grade between the studies done and how the actual one usually come out.
Hemankur ?
Yeah. See, if you have JORC resource established, which means that it is very extensive drilling. Probably, just to get, you would understand or should be able to relate to the Surjagarh asset. I think when we started, we were not confident of what grade it will be, because the initial grade will be there. But once you do drilling, which means that it is a very scientific methodology, you know which segment every 1 cu m is what grade. Then you maintain multiple stockpiles, and you decide on what particular grade is to be fed. There are certain portions which should be high grade, certain portions which are low grade. You maintain different stockpile of high grade, low grade. Then you create the blend, you know what blend. It is a very scientific methodology.
Hence, whatever is proven JORC results, there is very little deviation that you would expect on mining it, because it is already proven with a very high level of accuracy.
So, 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?
Yeah. Yeah. 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. 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. And we don't have the established ore 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. Gogia, to add to Hemankur's answer, the Surya Mines is around 12,000 tons targeted production, whereas the Etoile and Mutoshi mines are around 75,000 tons of production targeted in copper, plus 20,000 tons of cobalt. So as a percentage, as what Lloyds owns, it's around 12 out of 87 where we are having this small problem.
Got it. That is quite helpful. Just one last question, sir. If you could give me the targeted CapEx for FY 2027 and 2028 as well. I think we did INR 6,000 crore in the first half.
We have done around INR 6,000 crore in the first half. We should be doing a similar or a little bit, not less, but something more in the second half. So it should be around INR 13,000-odd crore in this whole year. We look at a similar figure in the next year also. Then, as Rajesh mentioned about the Steel Plant, what is the figure of Steel Plant coming up, then the majority would accordingly will be worked on that. So, it will be again around close to INR 10,000 or more in the year 2028 [inaudible].
Understood. Thank you so much. All the very best.
Thank you. Our next question comes from the line of Vikash Singh with ICICI 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. In terms of lucrativeness, could you just rank them, the most lucrative opportunity to the least one? What are the CapEx which we are going to spend in the next three year on individually copper through Thriveni and then the domestic we know basically?
I think each business in itself is quite lucrative by any standard. If you look at Thriveni, which is a service business and a steady business, in H1 we are having an 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 very, very steady business. The copper business, depending on the pricing, if we take today at $14,500, it is obviously very, very price-effective at the EBITDA as well as PAT level. So is iron ore and steel. 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. 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 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. Hello? Hello? Who here? Hello?
Participant has left the queue.
Okay.
Our next question comes from the line of Ritesh Bhagwati with Alpha Plus Capital. Please go ahead.
Thanks for the opportunity and congrats on good set of numbers. My first question is towards our copper targets. On slide 15 in our presentation, we have targeted copper production at 8,000- 10,000 tons for full year FY 2027. However, on slide 20, I see under the roadmap ramp-up, we are talking about FY 2027 at 5,850 tons. Just want to understand exactly what is the real FY 2027 targets for the copper?
Yeah, let me clarify that. I think 5,850 is the target that we are looking for the full year. In fact, earlier, when we had disclosed in the last quarter, the target was higher at 8,000 tons. But given the challenges that we are having in Surya, a large part of the effort is going towards completing the Chemaf plant because ore is coming from Chemaf through its own mines. Hence, we are looking at a 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 full. We may be looking at some cost optimizations there before we go to full production.
Okay, that makes sense. Secondly, we have also mentioned that we are planning for $300 million of NCDs to be raised, but the purpose is not yet clear. What would it be used for, if you could elaborate?
That's an enabling resolution what we have taken. We just wanted to keep ourselves ready if such an opportunity arises, and we already have this resolution in place, and we can go ahead with it. Everything obviously will be used more and more for CapEx, or that's what the intention is.
Okay, fine. Thanks. That's it from my side. Thank you.
Thank you. Next question comes from the line of Meet Bhuva with Entigrity Ventures & Partnerships. Please go ahead.
Yeah. Hi, am I audible?
Yes.
Yeah. I think I might have missed on the Chemaf debt side that you have answered. Currently we have $800 million of debt, and in the PPT it is mentioned that same will be cleared around into $50 million or something. Then you have mentioned that there will be a $500 million debt still after this discussion as well. Can you please clarify again on this part?
Yes, 100%. Basically, as I mentioned, we are also incurring CapEx, and for incurring that CapEx, ultimately, initially this is funded through our investment, but ultimately we are looking at raising debt from the U.S. party, some of the very well-known investors, as well as some of the multilateral institutions. If that is coming in, basically it will increase the debt in the company, but it will create more cash in the books for us. Yeah, at the Chemaf level, the long-term debt will be around $500 million, which includes the debt for completing the plants and the CapEx for completing the plants, and settlement of the past outstanding creditors with Chemaf.
Okay. Got it. Thank you so much.
Thank you. Next question comes from the line of Mehul Panjwani with 40 Cents. Please go ahead.
Hello, sir. Thank you so much for the opportunity. Sir, I have one question regarding the debt and the borrowings. We know with approximately about INR 18,100 crore of CWIP already, and our borrowings at INR 22,500 crore, and we have further investments planned in the thermal power plant and CVNE. How should we look at the funding requirements over the next two, three years?
I think at your numbers, because the debt what we are doing is around INR 9,500 crore of borrowing what the company has done on a standalone basis. That numbers what you mentioned of INR 25,000 crore is something what we have actually, if you are 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 rated together. That is how that number is. Otherwise, all our projects, we would obviously look at reasonable figures of less than 75%, around 65% of debt- to- equity. And that is how we have planned for all our CapEx.
Okay. And sir, 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.
Our debt is not high, as we would say. It would be on a reasonable level considering the income what the company is generating, the expansion, the projects what we are undertaking. So our debt is not on that level. It is not on high. It is very much within 1x, and what we are trying is always 1.5x of the coming 12-month EBITDA. So, we keep our debts accordingly. That is our plan. And yes, once the projects start coming up and then once the repayments are starting, then obviously that reduces as per the repayments.
Right, sir. Sir, thank you. What would be our—
Can I add one—
Yeah, please.
—one point in this when he says about CapEx. All this CapEx is paying off. Every two year, two and a half years, our top line is becoming our bottom line. Okay? Including this quarter, including this half year, if you look at two years past record, our bottom line is more than that year's top line.
Top line.
With that kind of growth, sustainable growth, profitable growth, the numbers may look high as a standalone absolute figure, 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 Thriveni MDO. Can you please elaborate on what has led to the deterioration?
I think this question was answered earlier.
Sorry, I joined a bit late. Yeah, sorry.
There is a presentation also. Basically, in the rainy season, we have lesser output. Cost remains the same, especially in Thriveni segment. Cost remains the same, and that is the main reason. If you look at H1 this year versus H1 last year, our margins are better by around 200 basis points.
400.
400 basis points, I am sorry. I was just trying to find the slide. It is continuing in a positive way. It is difficult to Again, with the growth, the overheads are there. The income does not start immediately.
Okay. Every Q2 for us is normally generally weak, is it? I mean, because of monsoon.
Yeah. Every Q2 is weak due to rainy season. This Q2, particularly due to the geopolitical, when the prices of HSD and explosives went up, the profitability got an extra hit. But overall, now these are being passed through. From always, this has been a historical that Q2 is always weaker as compared to other quarters.
This being 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.
No, sorry, sir. Can you repeat? I did not get this one, last one, what you mentioned.
Q2 in this year, our EBITDA margin is 37% in Lloyds Metals standalone.
Okay.
Yeah. Our H1, H2 margin is also 38%. That remains steady. Yeah. That is what we keep saying that Thriveni becomes a classic hedge operation with annuity business, I should not call it, he will not like it, but it is a steady business. That is the way the cash flow flows.
Right. 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 MDO will go up. Our copper operations, we have discussed that in this year would be slower in H2. I leave the rest of the calculation to you guys.
Right, and sir—
The pellet also will be very strong.
Sorry?
Pellet and DRI operations will also be very strong.
Right. Sir, hypothetically, if the war was not there in the entire H1, you would have reported far superior numbers?
I cannot go into hypotheticals like that, my friend.
No, I mean, just, I am not looking at any quantification, but just as a—
Wars and violence helps no one, that's my fundamental thinking. Looking at equating a theoretical thing with financials is beyond my core of understanding and explanation.
Thank you. Our next question comes from the line of Parthiv Jhonsa with Anand Rathi Share and Stock Brokers. Please go ahead.
Yeah, hi. Thank you for the opportunity. Sir, it's a bit fundamentally different question. It's pertaining to the Bougainville, actually. Considering Bougainville is still an autonomous government, right? The target what you have laid down is quite steep. I believe it's like about 175,000 tons of copper on an annualized basis. By when, because I believe it's still a couple of quarters down the line when they will get complete independence and everything. So, by when can we start building in this number of copper, the very first ounce, basically?
No, no. My opening statement was not about what our target is. My opening statement is what was being produced 40 years back in that operation.
Okay.
Okay, so I have not made any target. We have not signed any contract. Let's not jump ahead. We have no projections for PNG.
Okay. But if we just back of the envelope calculation, considering the grade, I think it even has a gold content in it, 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. Yeah, 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.
Yeah. Thank you very much, gentlemen, for joining us for the update on the second quarter two and the first half of the company. 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 will be happy to share, give you all the replies and the answers to your questions. Happy Diwali once again, 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 Share and Stock Brokers Limited, that concludes today's call. Thank you for joining us, and you may now disconnect your lines.