- Iron ore production rises to 6.05 mnt in Q1 FY27
- Pellet output reaches 1.69 mnt in Q1
Lloyds Metals and Energy reported iron ore production of 6.05 mnt in Q1 FY27, up 53% y-o-y from around 3.95 mnt in Q1 FY26. Iron ore sales increased 58% y-o-y to 5.46 mnt, although sales declined 11% q-o-q from 6.16 mnt in Q4 FY26. The higher production was supported by increased environmental clearance limits and a monthly production run rate of more than 2 mnt.
Pellet production stood at 1.69 mnt in Q1 FY27, while pellet sales increased 51% q-o-q to 1.34 mnt from 0.89 mnt in Q4 FY26. Around 75% of pellet sales were domestic, while 25% were exported. The second pellet plant, commissioned in May 2026, reached 100% capacity utilisation within four months, supporting the sequential increase in pellet volumes.
The divergence between iron ore production and sales was partly driven by higher internal consumption of ore for value-added products. This has shifted a greater portion of the value capture from iron ore sales towards pellets and downstream products.
Pellet economics strengthen
Pellet realisation stood at INR 11,783/t, while EBITDA reached INR 5,803/t in Q1 FY27. Captive iron ore and slurry pipeline logistics supported pellet profitability. The slurry pipeline generated around INR 329 crore of cost savings during Q1, helping reduce logistics costs.
Value-added products lift profitability
Standalone EBITDA increased 172% y-o-y and 31% q-o-q to INR 2,120 crore in Q1 FY27. EBITDA margin expanded to 39.2% from 32.9% in Q4 FY26. The improvement was driven by higher iron ore volumes, pellet ramp-up, stronger sponge iron volumes, lower logistics costs and a higher contribution from value-added products.
Odisha volumes set to rise
Thriveni Earthmovers & Infra Private Limited’s new mining operations at Laserda-Pacheri and Dalpahar are expected to add around 1.5 mnt and 3 mnt of production respectively in FY27. Odisha production is targeted at 34-35 mnt, up around 39% y-o-y. The new contracts are expected to deliver EBITDA margins of more than 40%, compared with the broader MDO business margin guidance of 27-30%.
BHQ beneficiation project on track
The BHQ beneficiation project remains targeted for commissioning by March 2028. Recovery from pilot testing has reached around 38%, above the original 35% assumption, with finished product expected at 66-67% Fe.
Capex and expansion
The company spent around INR 3,005 crore on capex in Q1 FY27 and expects ongoing-project capex of around INR 8,500 crore during FY27. Total capex is expected at around INR 11,000 crore annually over the next two years, rising to INR 15,000-20,000 crore in the third year.
FY27 production targets
The company has set FY27 iron ore production guidance at 26 mnt, compared with 21.96 mnt in FY26. Pellet production is targeted at 7.75-8 mnt, against 3.03 mnt in FY26. DRI production is targeted at 825,000 t, compared with 484, 000 t in FY26.
Outlook
Higher iron ore availability, rising pellet capacity and greater internal conversion into value-added products are expected to remain the key volume and margin drivers through FY27. The combination of increased mining output and downstream capacity is also expected to support the company’s targeted 26 mnt iron ore and 7.75-8 mnt pellet production for the year.
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