Tuesday, 18 November 2008

Analysts' Picks: Lanco Infratech

Lanco Infratech
cmp: Rs 145.30
target price: 171

ICICI Securities has maintained its ‘buy’ rating on the stock. “We believe that the expected commissioning of Amarkantak I (300MW) by end-November 2008 would result in reducing execution risk/discount associated with Lanco’s power portfolio,” said ICICI Securities in a note to its clients. According to ICICI Securities, Lanco’s ongoing litigation with MPSEB to convert Amarkantak I from PPA (power purchase agreement) to merchant is expected to be resolved soon and even 50% conversion will provide upside of Rs 35/share.

“Lanco has emerged as the sole bidder for the 1,320 MW coal-based power plant at Rajpura, Punjab. We expect the tariff of the project to be lucrative, providing healthy upside along with Rs 70 billion EPC potential,” said the note. The NAV (net asset value) estimates for Lanco stand at Rs 65 billion or Rs 296 per share, the ICICI note said. “Based on our FY09E, FY10E & FY11E EPS estimates of Rs 16, Rs 19.3 & Rs 26.3, Lanco trades at P/E (price to earning) of 10.7 times, 8.8 times & 6.5 times, respectively,” the note added.

Source: EconomicTimes

No comments:

Post a Comment

DISCLAIMER: The author is not a registered stockbroker nor a registered advisor and does not give investment advice. His comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity, index or any other financial instrument at any time. While he believes his statements to be true, they always depend on the reliability of his own credible sources. The author recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions, and that you confirm the facts on your own before making important investment commitments.