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Lanco Infratech (LAIN.BO) Rs18.70
Equity Research
First Take: Below expectations on higher eliminations
News
Lanco Infratech (Lanco) reported 1QFY12 adjusted PAT of Rs2.3bn (before
elimination) down 8.7% YoY and PAT of Rs138mn (after eliminations)
down 93% YoY vs our estimate of Rs1.8bn and Bloomberg consensus of
Rs1.0bn. The reported PAT is significantly lower than our estimates
primarily on account of: 1) eliminations of income from the construction
division due to accounting policy of the company to eliminate income from
projects which are internal in nature; 2) higher tax rate of 59%. However,
cash profit was up 1% to Rs 3.67bn from Rs 3.62mn a year ago. Revenue
from construction business was up 64% to Rs 17.3bn from Rs 10.6bn in
1QFY11 while from power business was down 24% to Rs 10.8bn from Rs
14.3bn a year ago.
Analysis
The power division performance is in line with our estimates with
merchant realizations of about Rs3.8/kwh and PLF’s for Kondapalli and
Amarkantak projects ranged between 70-75%. The EBITDA margins for the
construction division are at 18%. The Griffen coal mine produced about
0.7mn ton for the quarter with EBITDA margins of about 23%.
Implications
We place our target price and earnings estimates under review pending
more details on the results and the progress of their projects under
development during the earnings call.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Lanco Infratech (LAIN.BO) Rs18.70
Equity Research
First Take: Below expectations on higher eliminations
News
Lanco Infratech (Lanco) reported 1QFY12 adjusted PAT of Rs2.3bn (before
elimination) down 8.7% YoY and PAT of Rs138mn (after eliminations)
down 93% YoY vs our estimate of Rs1.8bn and Bloomberg consensus of
Rs1.0bn. The reported PAT is significantly lower than our estimates
primarily on account of: 1) eliminations of income from the construction
division due to accounting policy of the company to eliminate income from
projects which are internal in nature; 2) higher tax rate of 59%. However,
cash profit was up 1% to Rs 3.67bn from Rs 3.62mn a year ago. Revenue
from construction business was up 64% to Rs 17.3bn from Rs 10.6bn in
1QFY11 while from power business was down 24% to Rs 10.8bn from Rs
14.3bn a year ago.
Analysis
The power division performance is in line with our estimates with
merchant realizations of about Rs3.8/kwh and PLF’s for Kondapalli and
Amarkantak projects ranged between 70-75%. The EBITDA margins for the
construction division are at 18%. The Griffen coal mine produced about
0.7mn ton for the quarter with EBITDA margins of about 23%.
Implications
We place our target price and earnings estimates under review pending
more details on the results and the progress of their projects under
development during the earnings call.
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