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F o r e x l o s s d a m p e n s t h e s h o w…
Higher eliminations (42% of sales), lower PLFs in one of its power plants
(owing to maintenance shutdown), higher EBITDA margin in the
construction division and forex loss of | 287.8 crore were key highlights
of Lanco Infratech’s Q2FY12 earnings. Adjusting for elimination & forex
loss (that is notional in nature), Q2FY12 adjusted PAT was at | 14.1 crore
(way below our estimates). We maintain BUY with a revised target of |
17/share (the valuation considers operational projects only). A further
delay in Lanco Budhil (70 MW), gas supply for 765 MW Kondapalli 3
(turbine ready for synchronisation), higher gross debt/equity (4.65x) and
verdict on Perdaman case are key overhang on the stock.
ƒ Commissioning of 600 MW in FY12, Lanco green project delayed
The current capacity of the company stands at 3892 MW. The
operational capacity stands at 2087 MW. In November 2011, the
company synchronised 600 MW - Anpara unit II. Udupi – 600 MW
commissioning is being delayed till June 2012. We expected Lanco
Budhil (70 MW) and Lanco Teesta to get commissioned in Q2FY13.
ƒ High EBITDA margins in construction segment
Construction division margins stood at 19%. The consolidated order
book stands at | 29230.5 crore of which ~ 85-90% is from the
captive business (thermal power and solar power).
V a l u a t i o n
At the CMP of | 14.5, the stock is trading at a P/E of 14.5x and 10.8x on
FY12E and FY13E EPS, respectively. Similarly, on P/BV multiples, the
stock is trading at 0.8x FY12E and FY13E, respectively. We have valued
the stock on a sum of parts valuation (SOTP) basis.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
F o r e x l o s s d a m p e n s t h e s h o w…
Higher eliminations (42% of sales), lower PLFs in one of its power plants
(owing to maintenance shutdown), higher EBITDA margin in the
construction division and forex loss of | 287.8 crore were key highlights
of Lanco Infratech’s Q2FY12 earnings. Adjusting for elimination & forex
loss (that is notional in nature), Q2FY12 adjusted PAT was at | 14.1 crore
(way below our estimates). We maintain BUY with a revised target of |
17/share (the valuation considers operational projects only). A further
delay in Lanco Budhil (70 MW), gas supply for 765 MW Kondapalli 3
(turbine ready for synchronisation), higher gross debt/equity (4.65x) and
verdict on Perdaman case are key overhang on the stock.
ƒ Commissioning of 600 MW in FY12, Lanco green project delayed
The current capacity of the company stands at 3892 MW. The
operational capacity stands at 2087 MW. In November 2011, the
company synchronised 600 MW - Anpara unit II. Udupi – 600 MW
commissioning is being delayed till June 2012. We expected Lanco
Budhil (70 MW) and Lanco Teesta to get commissioned in Q2FY13.
ƒ High EBITDA margins in construction segment
Construction division margins stood at 19%. The consolidated order
book stands at | 29230.5 crore of which ~ 85-90% is from the
captive business (thermal power and solar power).
V a l u a t i o n
At the CMP of | 14.5, the stock is trading at a P/E of 14.5x and 10.8x on
FY12E and FY13E EPS, respectively. Similarly, on P/BV multiples, the
stock is trading at 0.8x FY12E and FY13E, respectively. We have valued
the stock on a sum of parts valuation (SOTP) basis.
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