Lloyds Metals: ₹190 Cr DRI Capacity Expansion

has approved ₹190 crore to expand its DRI capacity beyond 9 lakh tonnes per annum. The company will invest ₹140 crore at its Ghugus plant in Chandrapur and ₹50 crore at its Konsari plant in Gadchiroli. Ghugus capacity will increase from 6.30 lakh MTPA to 8.15 lakh MTPA, while Konsari capacity will rise from 70,000 MTPA to 92,400 MTPA. The expansion is expected to be completed within one year and will be funded through internal accruals. The expansion takes the company's combined DRI capacity to more than 9 lakh MTPA. Lloyds Metals is using debottlenecking and process optimisation rather than building entirely new DRI facilities, which makes the investment more focused on increasing utilisation of its existing infrastructure. My view is that the important factor here is the combination of capacity growth and internal funding. If the additional capacity is absorbed at healthy realisations, the expansion can improve operating leverage. The key risk is that higher capacity does not automatically translate into higher profitability if steel and DRI spreads weaken. I will watch capacity utilisation, production volumes and operating margins after the expansion is commissioned. Stance: Capacity expansion is constructive, with margins and utilisation as the key checks. Disclosure: Add your actual holding, position or interest disclosure before publishing.