Lanco Infratech Ltd. Issues still persist; Maintain hold ::Emkay

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Lanco Infratech Ltd.

Issues still persist; Maintain hold

HOLD

CMP: Rs12                                        Target Price: Rs17

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n     Lanco has reported a consolidated loss of Rs2.6bn – mainly due to (1) Amarkantak reporting marginal loss vs. Rs1.7bn profit qoq and (2) Rs2.8bn forex loss (griffin, EPC and power).

n     Adjusted consolidated loss, after adjusting for (1) forex losses of Rs2.8bn and (2) exceptional gain of Rs489mn, stood at Rs205mn vs. expectations of profit of Rs883mn – significantly below mainly due to Amarkantak loss

n     Further delay in Udupi and Anpara COD (4Q12-1Q13). Cut earnings by 70/31% in FY12E/13E - driven by delays, higher fuel cost and Amarkantak lower tariffs

n     Issues persist - (1) fuel, (2) Udupi and Anpara delays, (3) perdaman case, (4) inv. planned in solar despite stretched BS, (5) gas plants merchant & (6) int. rates; maintain hold