UBS maintains 'Buy' rating on Lanco Infra
UBS maintains `Buy' rating on Lanco Infra with a price target of Rs 600.
By ET Bureau |
LANCO INFRATECH
RESEARCH: UBS
RATING: BUY
CMP: Rs 554
UBS maintains `Buy' rating on Lanco Infra with a price target of Rs 600. According to news reports, L&T is the lowest bidder with a tariff of Rs 2.89/unit, followed by Welspun with a bid of Rs 2.94/unit. There were six bidders for the 2x660-MW super-critical project, which went for re-bidding by the Punjab State Electricity Board. The other four bidders were Lanco, Adani Power, GMR and JSW Energy. Considering that this is a domestic coal-based project, the bids were not aggressive.
Lanco was the third-lowest bidder and quoted a tariff bid of Rs 2.98 per unit. During the previous bidding process conducted during H1FY09, Lanco had emerged as the lone bidder for the project with a tariff of Rs 3.38 per unit. However, this bid was rejected by the state regulator as it viewed this power as expensive and also due to there being only one bidder.
We do not think this is a negative development for Lanco as it already has a robust pipeline of projects with approximately 3,600 MW under construction and approximately 4,000 MW under development. UBS derives the price target using a sum-of-the-parts valuation method.
RESEARCH: UBS
RATING: BUY
CMP: Rs 554
UBS maintains `Buy' rating on Lanco Infra with a price target of Rs 600. According to news reports, L&T is the lowest bidder with a tariff of Rs 2.89/unit, followed by Welspun with a bid of Rs 2.94/unit. There were six bidders for the 2x660-MW super-critical project, which went for re-bidding by the Punjab State Electricity Board. The other four bidders were Lanco, Adani Power, GMR and JSW Energy. Considering that this is a domestic coal-based project, the bids were not aggressive.
Lanco was the third-lowest bidder and quoted a tariff bid of Rs 2.98 per unit. During the previous bidding process conducted during H1FY09, Lanco had emerged as the lone bidder for the project with a tariff of Rs 3.38 per unit. However, this bid was rejected by the state regulator as it viewed this power as expensive and also due to there being only one bidder.
We do not think this is a negative development for Lanco as it already has a robust pipeline of projects with approximately 3,600 MW under construction and approximately 4,000 MW under development. UBS derives the price target using a sum-of-the-parts valuation method.
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