16 November 2010

Lanco Infratech Ltd - Q2FY11 Earnings Updates (Keynote Capitals)

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Q2-FY11 earnings updates on Lanco Infratech Ltd

The company has posted total revenue growth of 12% YoY to `2459.4Cr from `2194.3Cr for the quarter ended 30th Sept, 2010. EBIDTA grew 48% to `489.1Cr from `331Cr and PAT showed negative growth of 43% to `70.3Cr from `122.6Cr mainly due to higher depreciation charge at 14.5%. However, Cash PAT was up by 61% to `238.5Cr from `148.6Cr.

Developments during the quarter
Ø        The company is planning eight (2x660MW) new projects in the States of Tamil Nadu, Andhra Pradesh, Chattisgrah, Orissa, Uttar Pradesh, Karnataka for which various order have been placed on the contractors & OEM suppliers. The current order book doesn’t include these projects.
Ø         The company has received financial closure of orders worth `6941Cr. The debt sanctioned to the tune of `5550Cr by the consortium of 10 banks including PFC lead banker) for the four projects namely; Kondapalli III (2x366MW), Amarkantak (2x660MW), Vidarbh (2x660MW) and Babandh (2x660MW). As on date, the projects are proceeding as per schedule.
Ø         The company is yet to receive COD for Udupi II project due to technical reasons. However, the company may get compensation for the delay. Through this project, the company is also selling power on UI basis. Revenues derived from it will be shown in coming quarters.


Valuation & Recommendation

We maintain a positive outlook on the company on the basis of its performance, order inflow and execution capabilities and give a ‘buy’ recommendation with the revised target price of Rs79.6 on SOTP methodology.

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