Why JP Group was among top losers today

Stocks of JP Group are in the top losers today. Jaiprakash Power Ventures is sitting at a lifetime low with cuts of approximately 15 percent. JP Infratech is sitting at a lifetime low of just about Rs 23. That entire group has cracked quite a bit in the day’s trade. Reports, CNBC-TV18's Pragya Bhardwaj.

There was a lot of flood in the Uttarakhand area and the company’s Jaiprakash Power Ventures has two important projects in that particular project. 1) The Karcham-Wangtoo project, which is the company's largest and the biggest and the most profitable project with a capacity of 1,000 megawatts. 2) The Vishnuprayag project which is the 400 megawatt project. Today, the company has indicated to the exchanges. There were a lot of murmurs that the company’s operations have shut down. Along with that NHPC, SJVN - all of these hydro power companies are facing a terrible feed because of the floods up North. The company also said that they have invoked a force major clause on their Vishnuprayag project. The assessment of the damages is something which is they cannot quantify at this time. All operations have been shut down on that particular counter. May is when the hydro power season starts for some of these companies. If the plant is shut down at the start of the season, analysts are only factoring in and the investors fear that this year. Generation could look extremely grim for Jaiprakash Power Ventures. So, we have seen that particular stock crack. Jaiprakash Associates was under bit of pressure on Friday when the news emerged that the company’s cement unit stake sale might not go through now and the deal has been called off because of valuations discomfort.  This is one of the key reasons why analysts have a buy rating and an over weightage on the stock. Morgan Stanley has an over weight on the stock. They believe that de-leveraging of their balance sheet remains the key for any kind of stock outperformance going ahead. The company has a consolidated debt of almost Rs 60,000 crore. This cement stake sale which was being pegged at approximately Rs 4,000 crore was imperative to bring down the debt. The Enterprise Value (EV) per tonne that we were being discussed has come down from Rs 172 to Rs 163 now. The latest stay is Rs 155, so not doing well. That is because of both of news we have seen all the counters on that particular group contract.