Lanco Infra has posted a good set of results for the third quarter ended 31^st Dec 2009. Net sales fell 8% (YoY) at Rs.1832.20 crore and QoQ it was down 5%. In Q2, construction was the biggest contributor and it remained so in Q3 also. It grew by 26% in Q3 but rest all were on the slide. Power which was in the positive in Q2, showed a degrowth of 43% in Q3. the company has attributed this to lower power trading revenue and “Nil” naphtha based generation at Kondapalli I. Property development was the worst hit, it fell by a huge 98%.

Major cost cutting exercise helped shore up the profits. EBITDA was up by 43% on a YoY at Rs.297.80 crore and QoQ, it rose 51%. The company had a forex loss of Rs.12.20 crore, lower than the loss of Rs.19.10 crore in Q2. Net profit was up 34% at Rs.106.80 crore and QoQ, it was up just 9%.

The generation at Kondapalli Power Station for the quarter increased to 672 MUs but sales realisations continues to remain down. This plant currently has a capacity of 366MW at phase 1, operating at 94% of its load factor after it started receiving natural gas from Reliance Industries. It added 233 MW in Phase II and of this, it generated 78MUs, and booked sales of around Rs.44.20 crore, giving an average realization of Rs. 5.6 per unit. The balance 133MW in Phase II will go on stream before end of fiscal 2010. It is now firming up plans to add another 750MW capacity here once it starts receiving more gas from RIL. This expansion would cost around Rs.2,625 crore, based on an estimated Rs3.5 crore/MW. Its unit at Aban sold carbon credits to the tune of Rs.12.70 crore.

As of 31^st Dec 2009, the company incurred capex of Rs.12257.90 crore on power of which debt component was at Rs.8486.70 crore. On the road projects, its capex spent was Rs.805.20 crore of which debt was Rs.333 crore. The Construction and EPC order book position as on 31^st Dec was Rs.20902.40 crore.

In power, it currently has an operating power generation capacity of 1044MW comprising two gas-based plants, two wind energy plants and one hydro power project, spread over Andhra Pradesh, Tamil Nadu, Karnataka and Himachal Pradesh. Additional capacities under various stages of implementation stand at more than 10,000 MW. The company is developing 163 Kms of National Highways on BOT basis. A major beneficiary of the Budget, Lanco is a long term investment.