Lanco Infratech
Printed From: The Equity Desk
Category: Investment Ideas - Creating winning portfolios!
Forum Name: Stock Synopsis
Forum Discription: A bried discussion of companies on very specific matters. Normally this is the prelude for further research as always members would be discussing quality companies with good management only
URL: http://www.theequitydesk.com/forum/forum_posts.asp?TID=2108
Printed Date: 19/Apr/2025 at 7:32am
Topic: Lanco Infratech
Posted By: catchsudipto
Subject: Lanco Infratech
Date Posted: 30/Mar/2009 at 3:33pm
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Lanco
Infratech Limited claims that it is directly in the business of
Infrastructure Development & indirectly into Power Generation,
Power Trading & Property Development through various operating
subsidiaries. But if one observes the revenue flow & business
progress in the last 2 years, it is very clear that the company’s
business revolves around its many Power Generation Projects, either
already operational or being implemented. Through its subsidiaries,
Lanco Infratech is currently having an operational Power Generation
capacity around 525 MW (Mega Watt). Another 3900 MW of capacity will be
added by March’2012, for which construction is underway. Out of this, a
little over 2000 MW is expected to be commissioned by March’2010. Apart
from this, Lanco Infratech has another 4000 MW capacity under planning
& fund-raising currently & the same shall be ready for
operation by 2014-15. So, in all, Lanco Infratech has about 8000 MW
under various stages of implementation. The EPC cost, i.e. Engineering, Procurement & Commissioning cost for a Power Generation company is between Rs.4.5 – 5 crores per MW. That means, the subsidiaries of Lanco Infratech involved in Power Generation, are expected to give EPC contracts worth between Rs.36,000 – Rs.40,000 crores between the year 2007 & 2014. A small part of this already underway & the remaining will be executed in phases. All these contracts are being given to the main company, i.e. Lanco Infratech. That means, the holding company is executing all the EPC contracts of its subsidiaries involved in Power Generation. It makes good business sense for a Power Generation Company to have an in-house EPC division, because it helps to keep costs & schedules under control and since the work is being done for their own company, the quality level is also the best. Even other Power Companies like Reliance Power & Tata Power are handling their EPC work by themselves. Expansion of capacity will be a regular feature for all Power Generation Companies because India is currently short of Power by a huge margin & is expected to remain so for atleast another decade. Apart from EPC & Power Generation, Lanco Infratech has also won a couple of Highway construction projects under the Build-Operate-Transfer Scheme, for which the company will build the highway for the stretch awarded & then collect Toll for the same for a period of around 20 years. The company has also been awarded the contract to build a trans-shipment Port in Kerala. Lanco Infratech is also into real estate development with one major project called Lanco Hills at Hyderabad. It is developing 4 million sq-ft of residential space, 1 million sq-ft of IT SEZ office space, another 0.5 million of office space & one Luxury Hotel for which it has tied up with Gran Hyatt. The company is not expected to aggressively expand more into the real estate space, especially after the recent decrease in demand. Also, the company has its hands full for the next 5-6 years with the in-house projects and the already awarded ones. ------------- Make your Life as simple as possible. |
Replies:
Posted By: basant
Date Posted: 30/Mar/2009 at 3:52pm
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Enam was very bullish on this company at one point in time now I am not sure what their view is but what are the earnings and RoE estimates like?
------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: catchsudipto
Date Posted: 30/Mar/2009 at 4:07pm
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Lanco Infratech posted a net profit of Rs.354 crores last fiscal & it is not expected to be much different in the current fiscal. I am trying to find out ROE of this company. Fresh Power
Generation capacity is expected to be commissioned over the next 3-5
years, with capacity expected to multiply 5 times to over 2500 MW by
March’2011 from the current level of 525 MW. The same is expected to
rise to 4400 MW by March’2013. Plus, the
company’s EPC & Construction work is being ramped up at a rapid
pace. ------------- Make your Life as simple as possible. |
Posted By: catchsudipto
Date Posted: 30/Mar/2009 at 4:46pm
 what are the earnings and RoE estimates like?http://www.lancogroup.com/investor/pdf/2007-08/Press-Release-Qtr-Mar-08-consolidated.pdf - http://www.lancogroup.com/investor/pdf/2007-08/Press-Release-Qtr-Mar-08-consolidated.pdf http://www.lancogroup.com/investor/pdf/Q3-31-12-08/Press%20Release%20Q3FY09.pdf - http://www.lancogroup.com/investor/pdf/Q3-31-12-08/Press%20Release%20Q3FY09.pdf ------------- Make your Life as simple as possible. |
Posted By: basant
Date Posted: 30/Mar/2009 at 6:08pm
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Look for equipment suppliers rather then power generators because generation is a regulated business and we know how much the markets like regulated businesses.
Look at stocks like Thermax, ABB and BHEL if one has along term view on power!
------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |