Centrum puts 'Accumulate' on Jai Corp; sees value unlocking

Moneycontrol Bureau
 
Broking firm Centrum has advised investors to 'accumulate' Jai Corp as a tactical play on its real estate assets. It says the recent policy change on SEZ is highly favorable to the company.

"Considering its least debt, cash and current investments on books, value of investments in Reliance Industries and potential from unlocking of substantial value from its land bank, we strongly suggest our clients to make use of this weakness in the stock to accumulate," Centrum says in a research report.  

Jai Corp's Navi Mumbai SEZ has failed to take off due to land acquisition problems and lack of clients from abroad. The project has about 5,250 acres, of which the SEZ has possession of 4,125 acres.

"We believe that the land value of Mumbai SEZ, Navi Mumbai SEZ and Rewas Port itself is significantly higher than Jai Corp's current market cap. Recently the Maharashtra government has approved the new industrial policy, which allows SEZ developers to use 60 percent of the land for industrial purposes and the rest for residential and commercial purposes, this in our view would significantly benefit Jai Corp," the report further says.   

Centrum recommends the stock with a fair value of Rs 110.

At 15:52 hrs Jai Corp was quoting at Rs 43.20, down Rs 4.90, or 10.19 percent. The stock is down nearly 25 percent in the last 12-months.