JP Power great value buy, says Prakash Diwan

Prakash Diwan of Altamount Capital Management told CNBC-TV18, "Keeping the steam on the energy side alive, Jaiprakash Power is undergoing a lot of repair work. It has continuously had some over leverage issues. Two of the largest lenders for them, IDBI Bank and ICICI Bank have agreed to lend them significant quantity, Rs 5000 crore plus each and that is under the 5:25 scheme which was introduced for beleaguered power companies. The interesting part was JP Power has moved down from the Rs 28-29 all the way close to Rs 10-12, it is under-owned completely today, everybody has kind of exited with despondency saying nothing is going to happen till they divest or do something about it. However, the repair work is finally going to help because it is timed well and the interest rate cycle coinciding with it."

"If we look at the likes of a Ashok Leyland or some of the infrastructure companies which have benefitted from any repair in terms of leverage, JP Power is also one of them. The only reason why it was not doing well was overleveraging. So, that out of the way could mean it could get re-rated but it will take time. It is a great value buy at this point in time. You need to be patient for just two quarters and it could start throwing up some very good numbers," he said.