Lanco Infratech Ltd - Losses widen as operational challenges continue; Hold - Emkay

Reco: HOLD
CMP: Rs 5
Target Price: Rs 8

- Q1FY14 adj. loss of Rs4.3bn was higher than est. of Rs2.1bn loss. Kodapalli II, Amarkant losses higher than exp., taking total loss in power segment to Rs2.7bn vs. Rs2.9bn in Q4FY13

- Reported loss of Rs5.8mn included Rs2.2bn forex loss, Griffin EBITDA loss of Rs323mn in addition to forex loss of Rs688mn

- Mgmt stated that -1) Receivables still remain at Rs32.9bn, but UP payment scenario improving, 2) Rs18bn of repayment commitment (principle + int.) in FY14 despite parent debt CDR

- Factor in lower coal/ gas availability throughout FY14/15 & cut FY14/FY15 earnings. Cut target price to Rs8/sh. Project level hurdles (incl. PPA tariffs and disputes) to continue; cash flow management would be a challenge. Maintain Hold.

Source : Equity Bulls

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