Emkay's research report on Jaiprakash Power Ventures (JPVL)
JPVL’s 4Q15 adjusted loss at Rs3.6bn was in line with expectation. Nigrie both units have been commercialized and continue to report loss in the quarter
Transaction with JSWE is unlikely to result in material changes in our FY16/17E EPS estimates, given that the deal cash flow is likely to be used for parent debt repayment (interest cost is broadly in line with effective ROE yield at which plants are sold)
Even though current price leaves upside but cash flow issues continue for JPVL 1) on delay in JSWE deal conclusion, 2) losses in Nigrie
We retain BUY with revised target price of Rs11 (reduced due to Nigrie), though only based on valuations as cash flow issues will remain overhang. Selling of Nigrie and Bara at reasonable valuations could create significant upside, otherwise issues to persist
We retain BUY with revised target price of Rs 11, though only based on valuations as cash flow issues will remain overhang. Selling of Nigrie and Bara at reasonable valuations could create significant upside for the stock. Otherwise issues will persist in the near term.
Further, transaction with JSWE is unlikely to result in material changes in our FY16/17E EPS estimates, given that the deal cash flow is likely to be used for parent debt repayment (interest cost is broadly in line with effective ROE yield at which plants are sold).
Even though current price leaves upside but cash flow issues continue for JPVL 1) on delay in JSWE deal conclusion, 2) losses in Nigrie
"We remain positive on the stock from a 2 year perspective, given the cheap valuations", says Emkay Global Financial Services research report.
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