Prabhudas Lilladher is bullish on Lanco Infratech and has recommended accumulate rating on the stock with a target of Rs 14 in its February 13, 2013 research report.
“Lanco Infratech, Power segment sales in Q3FY13 were up by 14 percent and generation volumes rose by 30 percent QoQ. As internal project continues to be slow, EPC revenues were down by 28 percent QoQ and 70.3 percent YoY. Revenues from resources were up by 17 percent QoQ and 24 percent YoY, mainly driven by a 15 percent YoY sales volume growth. Solar segment revenues were down by 75 percent YoY. Overall sales for Q3FY13 were up by 15.2 percent YoY.”
“Kondapalli project reported a decline of 18.4 percent in volumes QoQ on account of lower gas availability. Amarkantak also reported 2.4 percent rise in volumes QoQ as last quarter, the plants were shut partially on account of maintenance and in this quarter, Unit 1 was shut due to tube leakage. Udupi reported growth in generation by 49 percent QoQ on account of full commissioning effect of 1200MWs and higher PLFs. Anpara, which was a main drag in Q2FY13, saw an increase in volumes by 82 percent QoQ as the PLFs improved to 52 percent. Budhil’s volumes suffered, as seasonally, it’s a weak period for Hydro power projects. Trading volumes were up by 48 percent YoY and down by 13 percent QoQ. Griffin production was up by 14 percent YoY and 10 percent QoQ at 0.8mt. Consolidated Power EBITDA margins adjusted for forex went down by 200bps QoQ, at 31 percent margins, mainly on account of lower tariffs and higher cost. Though the revenues declined, EPC margins improved by 500bps YoY and 400bps QoQ, mainly as some projects got completed.”
“At CMP, the stock is trading at 0.9x FY15E P/BV which is factoring in higher losses in existing assets. However, gradual tariff revision and improvement in operational performance may trigger some medium-term gains. We have revised our TP downwards taking into account higher debt burden and slower execution on EPC front. Moreover, the stock has corrected by 15 percent over the last quarter, with no major negative connotation from business point of view. Thus, we upgrade the stock from Reduce to Accumulate,” says Prabhudas Lilladher research report.
Public holding more than 90% in Indian cos
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