Ventura has recommended hold rating on Jaiprakash Associates, in its June 1, 2012 research report.
Ventura has recommended hold rating on Jaiprakash Associates , in its June 1, 2012 research report.
"Jaiprakash Associates Ltd reported 3.1% yoy increase in revenues to Rs 4,026.4 crore as against Rs 3903.9 crore reported in the previous corresponding quarter. However, EBITDA for the quarter stood at Rs 1019.4 crore, up by 21% yoy, driven by strong construction margins. The net profit stood at Rs 283.8 crore, down 6.5% yoy led by lower other income, higher interest and depreciation costs."
"Cement division’s revenues registered a 8% yoy and 22% qoq growth to Rs.1,686.7 crore on the back of higher dispatches of 5.8 mt (+38.6% yoy, 20.3% qoq). Volume growth was on the back of the recently commissioned cement plants. The EBIT margins for the cement division stood at 13%, down 200 bps on the back of higher depreciation and high raw material expenses."
"Robust assets and strong execution capability defines JP Associates, However, servicing of the huge debt remains a major concern on the stock. In addition, the forthcoming FCCBs repayment adds to the woes. The ability to repair balance sheet is the key to sustain the stock price. However, we are hopeful that the management through either stake sale or divestment of non-core assets would able to reduce its debt. Further, current proposition for prepayment of FCCBs, augur well for the company. At the CMP of Rs 62, the stock is currently trading at 10.2x and 8.4x its FY13 and FY14 consensus earnings estimates, we recommend a HOLD on the stock," says Ventura Securities research report.
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
To read the full report click here
Set email alert for
ADS BY GOOGLE
video of the day
EMs to be volatile near term; Nifty Dec target at 8600: UBS