Lloyds Enterprises Ltd Management Discussions

Global Economic Overview - FY26

The global economy demonstrated measured resilience in FY26, navigating a complex backdrop of persistent geopolitical tensions, the significant disruption to trade patterns triggered by a sweeping reassertion of US tariff policy, and the continuing recalibration of monetary policy across major economies. Global GDP growth is estimated at approximately 3.0-3.2% for calendar year 2025, broadly in line with the prior year, though marked divergence persisted across regions.

The United States, under the Trump administration, imposed broad tariff measures beginning in April 2025, including elevated duties on imports from key trading partners. This generated significant uncertainty across global supply chains, prompted retaliatory posturing from several economies, and weighed on global trade volumes.

Advanced economies grew at a subdued pace overall. The Eurozone remained sluggish, constrained by weak German industrial output and energy price pressures. Japan showed a moderate recovery aided by exports and fiscal support. Chinas growth moderated further, with domestic demand constrained despite targeted stimulus, even as it remained a key global growth contributor at approximately 4.5%. Commodity markets were mixed, crude oil prices saw volatility driven by OPEC+ policy and geopolitical events in West Asia in the latter part of the year, while gold emerged as the standout outperformer across all asset classes.

(Source: IMF World Economic Outlook, World Bank, OECD. E = Estimate; F = Forecast)

Indian Economic Overview - FY26

India retained its position as the worlds fastest-growing major economy in FY26, delivering real GDP growth of approximately 7.4-7.6% for the full year, a meaningful reacceleration from 6.5% in FY25. This was underpinned by robust domestic consumption, sustained government capital expenditure, rapidly easing inflation, and a decisive monetary policy easing cycle by the Reserve Bank of India.

Quarterly growth momentum was exceptional. Real GDP grew 7.8% in Q1 FY26, accelerated to 8.2% in Q2 FY26 the fastest in five quarters before moderating as base effects normalised. The RBI, which began the year projecting 6.7% full-year growth, revised its forecast progressively upward through the year, culminating in a 7.4% projection by February 2026. The NSOs advance estimate for the full year stood at 7.4%.

(Source: MoSPI, NSO, RBI. *Q3 and Q4 are advance/revised estimates. Full-year estimated at 74-7.6%)

Private consumption, accounting for approximately 58% of GDP, remained the primary growth engine, supported by rising household incomes, benign inflation, and the transmission of RBI rate cuts. Government capital expenditure stayed elevated, with the Union Budget 2025-26 allocating 11.21 Lakh Crores toward capital investment in roads, railways, ports, and urban infrastructure.

Inflationary pressures eased dramatically. Average CPI inflation fell to approximately 2.6% in FY26 from 4.63% in FY25, touching an eight-year low of 1.6% in July 2025. Food prices entered deflationary territory for nine consecutive months the longest in the CPI series enabling the RBI to cut the repo rate by a cumulative 125 basis points through the year, from 6.25% at the start to 5.25% by year end. Indias nominal GDP is estimated to have reached approximately INR 346.36 Lakh crore (USD 3.90 trillion) in FY26, cementing its position as the worlds sixth largest economy.

Real Estate Performance

The Indian real estate sector maintained its strong momentum in FY26, continuing the upcycle that began post

pandemic. Residential real estate remained the standout performer, driven by structural demand from urbanisation, favourable affordability, and the psychological shift toward home ownership.

Sales volumes across the top seven cities sustained robust growth, with mid-income and premium segments continuing to outperform. Developers reported healthy pre-sales and collections, supported by strong new supply in high-demand micro-markets. The Mumbai Metropolitan Region (MMR), in particular, sustained its position as the most active residential market in the country, driven by infrastructure upgrades including metro rail expansion, new coastal road connectivity, and ongoing slum rehabilitation (SRA) schemes that continue to unlock development opportunity.

The warehousing and logistics segment saw accelerating demand from e-commerce, manufacturing (driven by China+1 strategies), and the governments focus on supply chain infrastructure. Grade-A commercial real estate absorption improved, with flexible workspace solutions continuing to gain share of new leasing activity. Government policy support including RBI rate cuts improving home loan affordability, and PLI-linked manufacturing expansion creating ancillary real estate demand remained a constructive backdrop for the sector.

Commodities Performance

Commodity prices showed divergent trends during FY26. Steel prices remained under pressure for much of the year due to global overcapacity, particularly from China, though domestic pricing received partial support from the governments temporary 12% safeguard duty on specific steel imports introduced during the year.

Crude oil was volatile through FY26. Prices were relatively contained through H1, aided by OPEC+ production management, before geopolitical tensions in West Asia

in late FY26 particularly the conflict involving Iran pushed Brent crude sharply higher, hitting approximately USD 110 per barrel in late March 2026. This late-year energy shock weighed on Indian markets, widened the current account, and contributed to rupee depreciation. Iron ore prices tracked the trajectory of Chinese steel demand, remaining range-bound with a modest downward bias through much of the year before recovering on supply concerns.

Gold Performance

Gold was the standout asset class of FY26 globally, surging approximately 55% in USD terms through calendar year 2025 and crossing USD 4,000 per ounce for the first time in October 2025 a historic milestone. The metals exceptional performance was driven by a confluence of factors: persistent geopolitical tensions, safe-haven demand amid US tariff- driven global trade uncertainty, a structurally weakening US dollar, and sustained central bank accumulation of gold reserves.

In India, returns were further amplified by rupee depreciation, with gold delivering approximately 40-45% returns in INR terms over FY26. Indias Gold ETF AUM reached INR 1.71 Lakh Crore in March 2026, up 191% in twelve months and Gold ETF inflows in FY26 alone crossed INR 68,000 Crore, more than the combined total from FY21 through FY25. This exceptional investment appetite underscores golds evolving role from a traditional store-of-value to a mainstream financial asset within Indian portfolios.

The strength of gold prices through FY26 is directly relevant to LELs strategic investment in Geomysore Services (India) Private Limited (GMSI), Indias first privately-operated gold mine since Independence. With gold at historically elevated prices, the revenue and margin potential of the Jonnagiri project targeting up to 1,000 kg of annual production at peak is materially enhanced relative to the economics at the time of investment.

Company Performance Overview - FY26

FY26 was a transformative year for Lloyds Enterprises Limited (LEL), delivering its strongest-ever financial performance and executing meaningful strategic milestones across all four of its business verticals. The Company achieved record standalone and consolidated revenues, profit after tax, and earnings per share, while simultaneously advancing its corporate restructuring and expanding its portfolio of high-quality strategic investments.

Financial Performance

Standalone Financial Performance

On a standalone basis, Total Income grew 29.57% to INR 812.09 Crore in FY26. Revenue from Operations was INR 463.20 Crore. The significant driver of the years uplift was Other Income of INR 348.89 Crore, reflecting substantial gains from strategic investments and treasury activities evidence of LELs portfolio approach generating material returns. EBITDA surged to INR 344.65 Crore from INR 34.89 Crore, with EBITDA margins expanding dramatically by 3,687 bps to 42.44%. PAT on a standalone basis was INR 268.09 Crore versus INR 16.43 Crore in FY25, a 1,531.7% increase. Basic EPS improved to INR 1.98 from INR 0.13.

Consolidated Financial Performance

On a consolidated basis, Total Income grew 39.01% to INR 2,183.71 Crore. Revenue from Operations was INR 1,756.29 Crore, an 18% increase over FY25. Consolidated EBITDA surged 170.75% to INR 543.34 Crore, with margins expanding 1,211 bps to 24.88%. Consolidated PAT was INR 416.96 Crore (up 237.9% YoY), including a share of profit from associates of INR 42.43 Crore ?€” a marked reversal from the prior years share of loss of INR 2.92 Crore. Basic EPS on a consolidated basis improved to INR 3.08 from INR 0.97 in FY25.

Business Segment Review

1. Metals Trading

LELs metals trading business encompassing steel and allied products as well as iron ore pellets remained the primary revenue driver for the standalone entity in FY26, with Revenue from Operations of INR 463.20 Crore. The business serves both domestic and export markets, operating as an agile intermediary within Indias steel supply chain.

The domestic steel environment was characterised by strong demand in infrastructure and construction segments, partially offset by pricing pressure from global overcapacity, particularly from Chinese steel exports. The governments 12% safeguard duty on specific categories of steel imports provided partial relief to domestic pricing dynamics and supported trading margins. The Company expanded its portfolio during the year to include iron ore pellets for both domestic distribution and export worth INR 70 Crores., further integrating its participation in the steel value chain.

2. Real Estate ?€” Lloyds Realty Developers Limited (LRDL)

Lloyds Realty Developers Limited (LRDL), a 60.38% subsidiary of LEL, made meaningful strategic progress in FY26, building a robust pipeline that positions the business for substantial revenue generation over the next 3-5 years. LRDL follows an asset-light model emphasising joint ventures, minimal upfront capital, and superior project IRRs.

Key milestones in FY26 included:

Taloja, Navi Mumbai ?€” Warehousing & Logistics:

Non-binding MoU entered in Q2 FY26 covering a prime ~99-acre land parcel (plus ~32-acre aggregation potential), marking LRDLs entry into the fast-growing warehousing and logistics infrastructure sector.

Khopoli Residential Township ?€” Over 170 Acres: MoUs signed for approximately 175 acres for development into an integrated residential plotted township with premium housing and community infrastructure, addressing rising demand in the extended MMR region.

Aggregate Pipeline: Total land under recent MoUs now exceeds 270 acres across MMR growth corridors, with cumulative revenue potential exceeding INR 5,000 Crores.

LRDLs active pipeline also includes projects in Bandra (SRA and commercial), Goregaon (West) redevelopment, and Ghodbunder Road, Thane (mixed- use). The planned demerger of LRDL into a separately listed Lloyds Realty Limited is expected to unlock the embedded value of this growing portfolio for LEL shareholders.

A significant corporate restructuring was initiated during FY26 to sharpen the strategic focus of Lloyds Enterprises Limited. The Company plans to first merge its real estate subsidiaries Lloyds Realty Developers Limited and Indrajit Properties Private Limited into itself, and subsequently demerge the consolidated real estate business into a new, separately-listed entity, Lloyds Realty Limited.

Real estate and trading are fundamentally different businesses , in their capital requirements, risk profiles, and return timelines. A combined structure, while operationally manageable, does not always allow each business to be fully appreciated for its distinct characteristics and long-term potential. The Board believes that businesses which are transparently structured and independently evaluated tend to attract more appropriate valuations over time

The real estate portfolio has steadily accumulated value within LELs consolidated structure; however, this value has remained embedded and has not been independently visible or accessible to shareholders. The demerger is expected to address this directly.

Post-demerger, shareholders will hold separate, clearly defined interests in two distinct businesses. This enables independent valuation, sharper capital allocation, and more informed investment decisions

3. Engineering ?€” Lloyds Engineering Works Limited (LEWL)

Lloyds Engineering Works Limited (LEWL), in which LEL holds a 33% strategic stake, sustained its outstanding performance trajectory in FY26. LEWL had delivered its highest-ever Revenue and Profit After Tax in FY25, and continued this momentum in FY26, anchored by a record consolidated order book of over INR 8,336 Crore comprising Infrastructure (INR 5,692 Crore), Engineering (INR 2,493 Crore), and Electrical (INR 151 Crore).

Key strategic advances at LEWL during FY26 included its EPC-led transformation via acquisitions (Techno,

MetalFab), new technology partnerships (EPS Gen-4 with TMW, marine loading arms with TB Global, expanded Fincantieri alliance to CPP and shafting), strategic partnerships with FlyFocus (drones) and CEMI (industrial process optimisation), and ongoing capacity expansion at its Murbad (Thane) cluster targeting approximately 2x throughput. LEWL remains debt-light with blue-chip, repeat clientele across steel, oil and gas, ports, and shipyards. Its value creation flows directly to LEL shareholders via LELs 33.58% holding.

4. Gold Production ?€” Geomysore Services India Pvt. Ltd. (GMSI)

In FY26, LEL made a landmark strategic investment of ~INR 204 Crore to acquire a ~50% stake in Prakar Estates and Promoters LLP which has a controlling stake of ~61% in GMSI. Which makes LELs stake at effectively 30.50% in GMSI, operator of the Jonnagiri Gold Mine in Andhra Pradesh Indias first privately-operated gold mine since Independence. This investment represents a high-conviction, long-horizon entry into a structurally attractive new asset class.

Key project parameters:

Fully Permitted: Environmental Clearance (EC) valid through 2043; Consent to Operate (CTO) secured. Open-pit mine with straightforward metallurgy across East, West, South, and North blocks.

Resource Base: JORC-compliant resources of ~8.2 million tonnes at 1.49 g/t (~12 tonnes of gold), with upside potential to ~32 tonnes through further drilling, and an overall JORC estimate of up to 42.5 tonnes.

Production Trajectory: Pre-production trials produced approximately 60 kg of gold. Commercial ramp-up is underway, with planned output of ~600 kg per annum from FY27 and peak potential of ~1,000 kg per annum over a 15-year mine life.

Financial Potential: Project-level revenue potential of ~INR 600 Crore per annum at ~75% EBITDA margins. LELs attributable EBITDA at ~30.50% stake is estimated at ~INR 142 Crore per annum at peak production.

GMSI is currently carried at cost as a strategic investment in the Companys books. As the mine scales and the asset continues to demonstrate its potential, the management will look at how best to reflect this value in the Companys financials in a manner that is most meaningful to shareholders.

With gold prices crossing INR 16,000/gram in FY26 levels far above those at the time of the original

investment thesis the financial potential of the Jonnagiri project is materially enhanced.

5. Strategic Investment ?€” Lloyds Metals and Energy Limited (LMEL)

Through its stake in Lloyds Metals and Energy Limited (LMEL), LEL maintains exposure to one of Indias most efficient and integrated iron ore and steel platforms. LMELs competitive moat is anchored in its large, longlife iron ore resource base, an 85-km slurry pipeline now commissioned, and in-house beneficiation and pelletisation capabilities that deliver structurally low delivered costs. A major capacity expansion programme is in progress: mining throughput capacity approved at 55 MT; the 4 MT pellet plant expanding to 12 MT; DRI capacity expanding from 360 KT to 700 KT.

In FY26, LELs consolidated share of profit from associates (including LMEL) was INR 42.43 Crore a material swing from a share of loss of INR 2.92 Crore in FY25. LEL also exercised warrant conversions in LMEL during FY26, reinforcing its long-term conviction in this platform.

Outlook

FY26 has been a year of strong execution and deliberate strategic transformation for Lloyds Enterprises Limited. The Companys multi-vertical portfolio of metals trading, engineering (via LEWL), real estate (via LRDL), gold (via GMSI), and metals & energy (via LMEL) is generating increasingly diversified and growing earnings streams.

The macro environment for FY27 remains broadly supportive. Indias growth trajectory is projected at 6.4-6.9% by major institutions, with monetary conditions remaining accommodative, government capex sustained, and the 8th Pay Commissions recommendations expected to provide a meaningful consumption boost. The real estate cycle in MMR remains in a multi-year upcycle. Gold prices, while elevated, remain structurally well-supported by central bank demand, geopolitical risk, and a structurally softer US dollar all of which benefit GMSIs economics directly.

The planned demerger of the real estate business into Lloyds Realty Limited is expected to unlock meaningful value for shareholders and attract focused institutional attention to both entities. Management remains committed to converting the significant investments of FY26 in gold, real estate land aggregation, and engineering capability into tangible, sustained earnings and cash flow through FY27 and beyond.