Lanco Infra Q1 consol PAT seen down 63% at Rs 72.23 cr

Lanco Infratech is likely to post consolidated profit after tax of Rs 72.23 crore in the first quarter of FY12, a fall of 63% as compared to Rs 194.69 crore in the corresponding quarter last fiscal.

EBITDA too is seen going down 13% to Rs 520.77 crore from Rs 595.36 crore year-on-year. Operating profit margin is expected to be at 23.35% versus 28.01% during the same period.

However, total income is likely to increase 5% to Rs 2,230.58 crore from Rs 2,125.63 crore in the year ago period.

Expectations

May see earnings downgrade given slower EPC execution, lower PLFs due to KG gas shortage, sale of Amrkantak II power at lower rates to Haryana SEB

Less-than-targeted capacity additions and greater proportion of elimination is likely to impact earnings
* Lanco Amarkantak has started selling greater proportion of its power on PPA
* Due to lower gas supplies for Kondapalli - II project, earnings are expected to be lower YoY

Company is expected to see robust gross construction revenues; however inter-segment eliminations and lower merchant rates to drive relatively lower consolidated revenue growth

Lower merchant realizations on a YoY basis to impact company's profitability

Q1FY12 Highlights

Company is facing a major law suit of AUD 3.5 billion for non compliance of coal supply agreement with Perdaman, an Australian company

Company bagged its first international order of Rs 350 crore for power EPC in Q1FY12

However, lower PLFs will bring down the sales volumes and incentives which bring down EBITDA margins

Project commissioning

Company is expected to commission 1.9GW of projects in FY12 comprising the 1.2GW Anpara project, 0.6GW Udipi project ((Unit II)), 70MW (Lanco Green) hydro project

Company commissioned the second unit of Udipi project in Q1FY12 but due to lack of transmission infra, plant was not able to run on full load

Transmission line is expected by September 2011

The first unit of Anpara plant is synchronized and the second unit is expected in H1FY12