Lanco Infra Bags Rs 3293 Crore EPC Order

Lanco Infra has bagged an Engineering, Procurement and Construction (EPC) order worth Rs 3293 crore from Gujarat Industries Power Company. The order pertains to the civil works as well as off-shore and on-shore supplies. With this, we believe that the total order book of the company stands at Rs 29593 crore.

The EPC division of Lanco Infra has bagged this order for 3 x 300 MW of lignite-based thermal power project. The order would give some support to the EPC division of the company which is not in a great shape.

The EPC division of the company is not doing too well at the moment. This business in FY12 contributed 56% in the total revenues but in FY13, its contribution fell to just 28%. The revenues from this business declined by 50% in FY13 to Rs 4345. In Q4 too, the revenues declined by 62%, indicating that the business is severely impacted. Overall, in the fourth quarter, the company reported gross revenues of Rs 3726 crore, down 15% from Rs 4442 crore in Q4FY12. It also reported a loss of Rs 31 crore against a profit of Rs 72 crore a year ago.

The order book of the company was at Rs 26554 crore as on March 31, 2012 which declined to Rs 26300 crore after a year. The new order seems good with the shrinking order book. The stock, however, remains out of investors’ fancy and should be avoided.