Market Cap: ₹4.3k Cr
Lloyds Enterprises Ltd (Bse small cap), formally known as Shree Global Tradefin Limited is a company involved in the trading activity of steel and iron products.
Moreover, Lloyds Enterprises has also acquired a 60% stake in Lloyds Realty Developers Limited (LRDL). Realty Developers Ltd (LRDL) is a company that develops real estate both commercial and residential.
Business Model and Focus
Lloyd’s Enterprises operates solely within India, engaging in the import, export, and trade of iron, steel, alloy steel scrap, steel tubes, pipes, and wires. As of the FY 2023-24, the company has an order book worth Rs. 904 crores.
They claim to have completed over 2.5 million square feet of projects through land banks and controlled SPVs. Additionally, LDRL has over 15 lakh square feet of area under development.
How Strong is the Management?
Mr. Babulal Agarwal, the MD of Lloyds Enterprises, is a commerce and law graduate with over 54 years of experience in Steel Trading & Industry. He has expertise in legal, administration, and management fields.
Mr. Babulal Agarwal (Chairman & Managing Director)
Mr. Rajesh Gupta, the Executive Director, is a commerce graduate with over 35 years of experience in Production, Management, and Consultancy in the Steel and Power Industries. The company also has 4 independent directors with a combined experience of 128 years.
Mr. Rajesh Gupta (Executive Director)
How much money does the management take out of the business?
The median salary of employees in Llyods enterprises is ₹4.9 lakhs P/A. Against that, The managing director is taking 8.5 times the salary, while the Executive Director is taking 7.17 times. Moreover, the CFO is taking 4.7 times median the salary.
Moreover, In one of the comparisons with JSW steel, the figure of 7 times was found similar while in Jindal steel this figure was higher.
Financial Analysis of Lloyds Enterprises Ltd
The Bse small cap company has made a turnaround in its sales after the acquisition. As the cost synergy is also shared between the Lloyd Enterprises’ products used in the real estate sector. Therefore in the last 3 years, sales of LLyods made a compounded growth of 55%.
However, the profitability ratios and margins are less as the company is operating in the real estate and Base metal sectors where the margins are single digit.
Llyods mentioned that one of their key ratios are current ratios which is close to 1.8 this financial year, decreased from 2.9 previously.
The current ratio of this Bse small cap has decreased due to an increase in the company’s operations compared to last year, which has led to an increase in inventories, investments, and the use of the bank overdraft facility.
The companies in this sector try to maintain their current ratio near 2 due to high Working capital requrirements.
Industry Growth in Residential and Commercial Real Estate
The economy is projected to slow down in the near future. We forecast this by taking into account the lack of debt in the company, which is a major advantage in this capital-intensive sector.
The current focus of the Modi government is on infrastructure. However, it’s important to note that “infrastructure” mainly refers to commercial roads and bridges.
As commercial development thrives, residential development follows suit. According to a recent report by Livemint, the residential real estate market in India is booming due to the increasing demand from capable millennials.
Moreover, the NRIs are also seeking spaces in the metrocities and alike. according to Livemint, “The mid-segment price category has dominated sales, while the premium segment has seen a 22% increase. Luxury segment sales have also seen an 83% increase, with developers launching projects to cater to the demand trend.”
Disclaimer
The information presented here is for educational purposes only and should not be considered financial advice. Please do your own research before making any investment decisions.
