Lanco Infratech's stock has fallen sharply in the last six months mainly due to high fuel prices and low merchant tariffs. Of its total capacity of 2,744 mw, Lanco sells 32% under merchant sales. It plans to sell an equal proportion of its proposed capacity of 7,222 mw under merchant sales while the remaining will be sold on a long-term purchase basis with a fuel cost pass through.
With an improvement in the financial health of most state electricity boards, buying of merchant tariffs is expected to increase. The fuel cost pass through will insulate it from fuel risks. The current valuation of price to book value of three reflects all these risks.
Posts
![[ Registered ]](http://www.diarist.net/registry/button.gif){kind=small}
No comments:
Post a Comment