Steel capex, naval modernisation, three strategic acquisitions and a merger that creates a vertically integrated platform
There are turnaround stories. And then there are turnaround stories where the engineering revenues grow from Rs 501 million to Rs 10.5 billion in four years — a compound annual growth rate of over 110% — and where the pipeline ahead looks even larger than what has already been delivered. Lloyds Engineering Works is the latter.
The return of the Gupta family as promoters in 2021 marked the end of a decade of stagnation and the beginning of one of the most aggressive and focused management-led revivals in India’s listed engineering space. Equirus Securities initiates coverage with a BUY rating and a target price of Rs 125 — implying approximately 36% upside from the current market price — based on an SOTP valuation at 37x one-year forward P/E.
The Turnaround
The foundational story of Lloyds Engineering is one of revival rather than inception. The company was incorporated in 1994 and spent years as an integrated engineering and infrastructure solutions provider — but stagnated through a period of ownership transition that left the business undercapitalised and unfocused.
With the family back, capacity was expanded. Asset utilisation improved. Technology partnerships were forged. Engineering talent was brought in. And the business was repositioned around high-value, customised solutions for steel, hydrocarbons, oil and gas, power, nuclear and defence sectors.
The numbers speak for themselves — engineering revenues from Rs 501 million in FY22 to Rs 10.5 billion in FY26. “Backed by promoters with a proven execution track record, engineering revenues have grown from Rs 501 million in FY22 to Rs 10.5 billion in FY26, representing a CAGR of over 110%,” Equirus notes.
Equirus now projects Revenue, EBITDA and PAT CAGRs of 62.7%, 68.4% and 47.4% respectively over FY26-29 — a trajectory that would take consolidated revenues from Rs 13 billion in FY26 to Rs 56 billion by FY29, with management targeting Rs 100 billion by FY29-30.
Mining-to-Metal
The largest and most immediately visible growth driver is the steel sector. India is targeting 300 million tonnes of steelmaking capacity by FY31 — a target that requires massive investment in steel plant equipment, beneficiation technology, structural fabrication, utilities and EPC execution. Lloyds Engineering — through its integrated Mining-to-Metal platform — is positioned to capture a disproportionate share of this investment.
The strategic relationship with Lloyds Metals — which is undertaking a Rs 420 billion capex programme through FY30 — provides a captive anchor client of significant scale. But the opportunity extends well beyond one customer.
India’s steel capacity expansion is a multi-decade investment cycle, and Lloyds Engineering’s end-to-end capability from design through manufacturing to installation makes it one of the few domestic players that can handle the full scope of major steel plant projects. “LEWL and LICL are well positioned to benefit from India’s steel capex cycle through their integrated Mining-to-Metal platform,” the report states.
Defence
Defence is Lloyds Engineering’s most strategically exciting emerging vertical — and the addressable opportunity is expanding rapidly. The company is building its defence franchise around naval modernisation and indigenisation — India’s push to develop and manufacture naval platforms domestically rather than importing them.
LEWL is expanding its addressable opportunity per ship from Rs 80-100 million to Rs 400-500 million through new naval products, supported by technology partnerships with Fincantieri, FlyFocus, Virtualabs and Kliver Polska.
The sales visibility already established is significant. The naval division has approximately Rs 19 billion in sales visibility with approximately Rs 3 billion in expected order inflows over two years. The Aerospace and Strategic Systems division has approximately Rs 60 billion in sales visibility and Rs 20 billion in projected order inflows over three years.
“The company is expanding its addressable opportunity per ship from Rs 80-100 million to Rs 400-500 million through new naval products,” Equirus notes — a 4-5x expansion in revenue capture per platform that, combined with India’s growing naval order pipeline, creates a powerful long-term growth engine.
Three Acquisitions and a Merger
Over the last two years, Lloyds Engineering has executed three acquisitions that have materially broadened its engineering capability and addressable market. SISCOL added structural steel fabrication. Metalfab added heavy fabrication. Techno Industries added electrical engineering and vertical mobility — lifts, escalators and related equipment. Each acquisition has expanded the scope of projects the company can execute and the value it can capture across the project lifecycle.
The proposed merger of LICL, Metalfab and Techno into the listed entity transforms Lloyds Engineering from primarily an equipment manufacturer into a vertically integrated engineering platform spanning design, manufacturing, fabrication and EPC. “The merger enhances value capture across the project lifecycle, improves bidding capabilities for larger projects and is EPS accretive despite dilution,” Equirus notes. The combined entity will be capable of handling concept-to-commissioning projects — the highest-value end of the engineering services market — in ways that individual component businesses cannot match.
The Return Profile
One of the aspects of the Lloyds Engineering story is the return trajectory. ROE is expected to improve from 16.4% in FY26 to 24% by FY29. ROIC improves from 16.4% to 22.7% over the same period. EBITDA margins, currently at 14.5% in FY26, are expected to reach 16.1% by FY29 as the business mix shifts toward higher-value defence and integrated engineering work and operating leverage flows through on a significantly larger revenue base.
The current trading multiple of 44x FY27 P/E and 32x FY28 P/E looks demanding until the earnings trajectory is contextualised. Revenue nearly tripling over three years, EBITDA growing at 68% CAGR and PAT at 47% CAGR — with improving returns — is the kind of growth profile that justifies premium multiples in engineering companies with genuine structural tailwinds and proven management execution.
Scorecard
| Metric | Value |
|---|---|
| Current Market Price | ~Rs 92 (implied) |
| Target Price | Rs 125 |
| Upside | ~36% |
| Rating | BUY (Initiation) |
| Valuation | SOTP — 37x 1-year forward P/E |
| FY26 Revenue | Rs 13 billion |
| FY29E Revenue | Rs 56 billion |
| Revenue CAGR FY26-29E | 62.7% |
| EBITDA CAGR FY26-29E | 68.4% |
| PAT CAGR FY26-29E | 47.4% |
| FY29E EBITDA Margin | 16.1% |
| FY29E ROE / ROIC | 24% / 22.7% |
| Naval Division Sales Visibility | ~Rs 19 billion |
| Aerospace Division Sales Visibility | ~Rs 60 billion |