Lloyds Electric lights up
Lloyds Engineering Works is among the top three gainers on the BSE today morning with more buyers than sellers on the counter. The stock rose after the company disclosed a string of specialised defence-technology collaborations with European partners.
The stock opened at Rs 53.06 versus a previous close of Rs 50.15, hit an intra-day high of Rs 54.34 and was last trading around the Rs 53.5 VWAP, up roughly 6–7%. Volumes were elevated at about 28 lakh shares against a two-week average of just over 2 lakh, even though the counter still trades well below its 52-week high of Rs 84.26 and carries a rich trailing valuation of about 55–75 times earnings, substantially above the broader engineering sector multiple near 25 times.
The immediate trigger is a series of development agreements aimed at deepening the company’s defence and marine technology portfolio. On November 20, Lloyds signed two contracts with Poland’s Kliver Polska Sp; one to design and prototype a towed reel for a multifunctional underwater platform (valued at $1,63,900) and another to develop an operational test tilt stand (valued at 3,10,000 euro).
On December 4, it followed up with an agreement with Italy’s Virtualabs S.r.l. to jointly develop radar technology for defence and civil applications. While the ticket sizes are modest versus the company’s annual revenue, the work is in high-value niches, underwater systems and radars, that can lead to larger platform orders if prototypes are accepted.
These tie-ups are the latest in a steady pivot towards defence. Over the past 18 months, Lloyds has secured over Rs 80 crore of orders for steering gear and fin-stabiliser systems for next-generation offshore patrol vessels for the Indian Navy, with defence already contributing about 6% of the order book.
In May 2025 it also won a Rs 20.67 crore contract from Cochin Shipyard to supply fin stabilisers for next-generation missile vessels, reinforcing its position as a critical sub-system supplier to Indian shipyards.
More recently, it has signed an MoU with Poland’s FlyFocus to co-develop a SIGINT UAV for the Indian market, adding an aerospace-electronics angle to what was historically a heavy-engineering franchise.
From a balance-sheet and valuation standpoint, the story is more nuanced. The company completed a large rights issue in mid-2025, raising about Rs 1,050 crore via partly paid shares to fund growth and working capital, with the final call due by March 2026. Yet despite fresh capital, the stock has corrected about 8% over the past month and more than 20% over three months as investors digested the dilution and a soft patch in recent quarterly numbers. At current levels the market is effectively paying a high multiple for optionality on defence-tech scale-up and exports, rather than for the present earnings base.
For investors, today’s price action reflects recognition that Lloyds is stitching together a differentiated, defence-heavy technology stack—naval stabilisers and steering gear, underwater platforms, UAVs and now radar and test systems. The upside case rests on these prototypes converting into serial production orders over the next few years, leveraging India’s rising defence capital spend and “Make in India” push.
The key watchpoints, however, are execution risk on these technically complex projects, the lag between R&D spend and revenue, and whether earnings growth can catch up with an already premium valuation.