Until FY 2011-12 profits making by the Lanco Group has been excellent. With the generating capacity of 1000 MW in the FY 2011-12, Lanco had a profit of Rs 7.4 billion but, by FY 2013-14 despite enhancing the capacity by five folds to 4732 MW it has incurred a loss of Rs 6.71 billion against the estimated PAT of Rs 34.75 billion for the year FY 2013 due to the adverse impact of the prevailing macro-economic conditions, accroding to V. Sreenivas, COO, LANCO Group.

''Further, due to the damaged macro-economic environment since three years, funds could not be raised through IPO or QIP,'' he said.

''As power sector is highly capital intensive to that extent macro- economic issues cannot keep lingering like this for long.  These issues have to be addressed and the power sector has to be streamlined.  In our opinion the health of Discoms have to be restored to bring back the confidence of investors into power sector.  Steps must be taken to improve the financial condition of Discoms on priority basis.  Radical reforms are required to ensure viability of Discoms.''

''There are many unresolved macro-economic issues in the power and infrastructure sector that are being taken up by the new Government in order to revive these sectors.  The government is also sorting out the problem that belies the discoms and the fuel shortage issue that is taking the sector down.  We are hopeful that initiative of the Govt. to produce one billion tons of coal by the year 2019 is a good sign. Lanco is highly optimistic that all these corrective measures being taken by the government shall see a surge in growth that shall be unprecedented.  Lanco is confident that the overall scenario of the power sector shall improve in the next 15-18 months," he added. 

Sreenivas opined, ''Lanco plans to sell 3000 MW assets to raise Rs 50 billion cash and to reduce the additional debt of Rs 150 billion. Since last one year, we have been working on each of the projects to settle the issues and bring back viability.  With all these measures as well as in the background of CDR approval and various meetings with bankers and strategic partners, we are confident of driving the Group into same level of profitability again.'' 

''Lanco Group believes in the mantra of consolidating, repairing and rebuilding in line to leverage the opportunities that the country will have in the coming years,'' said Sreenivas.

Shares of the company gained Rs 0.52, or 6.44%, to trade at Rs 8.60. The total volume of shares traded was 978,226 at the BSE (10.21 a.m., Wednesday).