Lanco Infratech Lands EPC Contract Worth Rs 3960 Crore

Lanco Infratech has been awarded with the EPC contract of about Rs 3960 crore for the expansion of 600 MW Super Ennore thermal power station by the Tamil Nadu Generation and Distribution Corporation, Chennai.

After winning this contract, the company’s order book will mount to Rs 27005 crore from Rs 23045 crore. The contract, which involves equipment installation, will have to be executed within four years and will add approximately Rs 50 crore in its bottomline each year.

Lanco Infratech is an integrated infrastructure company whose business segment includes construction, power, EPC, infrastructure, property development and renewable.

From the past few quarters the company is making losses due to huge debt burden. But last week it opted for debt restructure in which the company got consent from lenders to convert Rs 3024 crore (out of Rs 11155 crore) of debt into equity. From debt restructuring, the company will be able to reduce debt burden of Rs 760 crore from income statement annually. Currently the stock of the company is trading at Rs 6.60 per share with an increase of 4.60% over the previous close. On the valuation front, it is trading 0.44 times of its book value while industry average is 0.88 times. This reflects that the stock is relatively undervalued and is likely to perform well in the long-term.