Lloyds Metals and Energy shares jumped 4.5 percent and hit a record high of Rs 1,099 on December 9, fuelled by brokerage firm Incred Equities' upbeat growth outlook and bullish price target.
Incred Equities initiated an 'add' call on Lloyds Metals, assigning it a price target of Rs 1,476 which translates into an upside potential of a whopping 40 percent from Friday's close. Incred's bullishness over Lloyds Metals stems from India's soaring steel demand and high iron ore prices, which are likely to benefit the company's growth trajectory.
At 12.45 pm, shares of Lloyds Metals and Energy were trading at Rs 1,088.50 on the NSE. The sharp surge in the stock was also triggered by a spike in trading volumes in the counter. As much as 12 lakh shares already changed hands so far, more than double the one month daily traded average of five lakh shares.
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Incred Equities predicts an iron ore deficit in India, largely due to the unviability of newly auctioned iron ore mines and the mismatch between steel scrap availability and rising steel production--all of which are expected to create a supply shortage. In its bear case scenario, Incred anticipates this shortage to kick in from FY27.
Amid this supply shortage, iron ore prices are expected to rise, with Lloyds Metals positioned to directly benefit from the higher prices," Incred believes. On that account, the brokerage also projects a remarkable 76 percent earnings-per-stock (EPS) CAGR for Lloyds Metals over FY24-27.
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