Lanco Infratech - Amarkantak and Udupi tariff approvals hold the key; Hold - Emkay

Reco: HOLD
CMP: Rs 12
Target Price: Rs 15

- 1Q13 Adj. loss at Rs2.9b is higher than our est. of Rs1.7b due to - (1) loss (Rs329mn) at Udupi, (2) higher losses in Anpara (Rs1.8b vs. est. of Rs1.3b) & (3) lower EPC profits due to cost over-runs in projects.

- Under recoveries at Anpara led by PAF (60%) restricted by fuel handling issues and forex losses - near term resolution unlikely; As per mgmt, Udupi interim tariff order likely soon.

- Waiting for clarity (unlikely in near-term) on Anpara, Amarkantak II profitability - will take a call on earnings post 2Q13.

- Valuations attractive at 0.5x FY13E book but upside limited unless clarity on 1) fuel supply esp at Kondapalli-II, (ii) tariff approval for AmarII/Udupi, (3) clarity on Anpara fuel logistics, (4) prod ramp up/cost reduction at Griffin. Retain Hold.

Source : Equity Bulls

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