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Lanco Infratech extends rally

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Capital Market
Last Updated : Sep 29 2015 | 4:01 PM IST

Lanco Infratech galloped 9.87% to Rs 4.12 at 15:20 IST on BSE, with the stock extending 17.19% gains in previous session triggered by its step‐down subsidiaries announcing the financial closure of cost overrun of projects with lenders.

Meanwhile, the BSE Sensex was up 154.14 points, or 0.6%, to 25,770.98.

High volumes were witnessed on the counter. On BSE, so far 23.85 lakh shares were traded in the counter, compared with an average volume of 7.38 lakh shares in the past one quarter.

The stock hit a high of Rs 4.19 and a low of Rs 3.75 so far during the day. The stock hit a 52-week high of Rs 8.07 on 5 November 2014. The stock hit a 52-week low of Rs 2.46 on 25 August 2015.

The stock had outperformed the market over the past one month till 28 September 2015, jumping 30.66% compared with 2.94% fall in the Sensex. The scrip had however underperformed the market in past one quarter, falling 13.99% as against Sensex's 7.89% fall.

The mid-cap company has an equity capital of Rs 248.42 crore. Face value per share is Re 1.

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Lanco Infratech had announced on Friday, 25 September 2015, that Lanco Kondapalli Power, one of the step down subsidiaries of Lanco Infratech entered into Power Purchase Agreements (PPA) with Telangana Discoms and Andhra Pradesh Discoms on 23 September 2015 and 24 September 2015 respectively aggregating to 1108 megawatts (MW) to operate at 50% pay load factor (PLF) under the gas pooling mechanism for the period 1 October 2015 to 31 March 2016 at Rs.4.70 per KWH. The realization per unit including the PSDF subsidy will be Rs. 6.14 per kWh.

Lanco Amarkantak Power (LAPL), another step down subsidiary of Lanco Infratech got a favourable order from the Supreme Court directing the South Eastern Coalfields to supply coal to the 300 MW Lanco Amarkantak unit II treating it as an unit having a subsisting long term PPA. LAPL on 24 September 2015 executed the documentation for flexible refinancing with its lenders for 2 x 300 MW Unit 1 & 2. LAPL has also completed the documentation for the cost overrun financial closure of its 2 x 660 MW expansion project.

Similarly, three of the other step down subsidiaries with under construction power projects also completed the documentation for respective cost overrun financial closure-the coal based Babandh and Vidarbha power projects each of 1320 MW capacity, and the 76 MW Mandakini hydro power project. In addition, the consortium of lenders to the 500 MW Teesta Hydro power project has decided to convert part of their loans in the project into equity under the strategic debt restructuring mechanism as an interim measure pending the induction of a strategic investor into the project. These are significant developments giving clear visibility to the completion of these projects costing almost Rs 40000 crore. With the commissioning of these plants, the company will have a consolidated operating power capacity of around 8000 MW by for the year ending 31 March 2018 (FY 2018). The EPC order book of Lanco (including power and solar projects) stands at Rs 28158 crore. The financial closure of the cost overrun proposals of the above projects will enable the execution of majority of this order book within the next two years.

On consolidated basis, Lanco Infratech reported net loss of Rs 300.36 crore in Q1 June 2015 compared to net loss of Rs 306.35 crore in Q1 June 2014. Total income fell 36% to Rs 1677.30 crore in Q1 June 2015 over Q1 June 2014.

Lanco Infratech is in the domains of engineering, procurement and construction (EPC), power, solar, natural resources and infrastructure.

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First Published: Sep 29 2015 | 3:13 PM IST

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