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JPA’s standalone recurring PAT at Rs1.07 bn was almost flat YoY
but 11% ahead of our estimates. While revenues for its key
businesses (cement, construction and real estate) were below our
estimates, the positive surprise was led by better-than-expected
margins at each of these businesses led by execution of higher
margin Karcham Wangtoo & Yamuna expressway projects during
1Q12 and ongoing cost optimisation at its cement business.
● Reported PAT, however, witnessed a decline of 79% YoY as JPA
had booked a gain of Rs4.1 bn during 1Q11 from the sale of 60
mn shares in Jaypee Infratech (during Jaypee Infratech’s IPO).
● During 1Q12, JPA commissioned 1 mt of cement grinding
capacity at Uttar Pradesh and 2.1 mt grinding capacity at Bokaro
(in JV with SAIL); taking its total cement capacity to 25.9 mt.
● We cut EPS for FY12-13 by 8-16% as we lower cement volumes,
cut sales from Noida real estate on likely slowdown from land
issues in neighbouring areas. We cut our price target by 18% to
Rs101 led by above factors and cut price target at JPVL as we
factor in potential risk of equity issuance. Maintain Outperform.
Margin improvement drives 1Q12 performance
JPA’s standalone recurring PAT at Rs1.07 bn was almost flat YoY but
11% ahead of our estimates. While revenues for its key businesses,
cement, construction and real estate, were below our estimates, the
positive surprise was led by better-than-expected margins at each of
these businesses. Construction margins were not only significantly
better on a YoY basis (on a low base of 1Q11) but were also 711 bp
higher than our estimates mainly led by execution of higher margin
Karcham Wangtoo & Yamuna expressway projects during the quarter.
Ongoing cost optimisation at its cement business led to cement
margin at 12.7%, 120 bp ahead of our estimates. Real estate margin,
at 53.4%, was also significantly ahead of our estimates.
Reported PAT witnessed a decline of 79% YoY as the company had
booked a gain of Rs4.1 bn during 1Q11 from the sale of 60 mn shares
in Jaypee Infratech (during Jaypee Infratech’s IPO).
Key developments during the quarter
During 1Q12, JPA commissioned 1 mt of cement grinding capacity at
Uttar Pradesh and 2.1mt grinding capacity at Bokaro (in JV with SAIL);
taking its total cement capacity to 25.9mt. In July 2011, JPA won two
E&C contracts worth 20.8 bn for construction of a dam, powerhouse and
other associated works of 990MW Punatsangchhu-II hydro power project
(JV project of the Royal Govt of Bhutan and Govt of India).
Cut price target and EPS for FY12-13. Maintain Outperform
We cut EPS for FY12-13 by 8-16% as we lower cement volumes, cut
sales from Noida real estate (would also impact construction sales) on
likely slowdown from land issues in neighbouring areas. We cut price
target by 18% to Rs101 led by above factors and cut in price target at
JPVL as we factor in potential risk of equity issuance. Outperform.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
JPA’s standalone recurring PAT at Rs1.07 bn was almost flat YoY
but 11% ahead of our estimates. While revenues for its key
businesses (cement, construction and real estate) were below our
estimates, the positive surprise was led by better-than-expected
margins at each of these businesses led by execution of higher
margin Karcham Wangtoo & Yamuna expressway projects during
1Q12 and ongoing cost optimisation at its cement business.
● Reported PAT, however, witnessed a decline of 79% YoY as JPA
had booked a gain of Rs4.1 bn during 1Q11 from the sale of 60
mn shares in Jaypee Infratech (during Jaypee Infratech’s IPO).
● During 1Q12, JPA commissioned 1 mt of cement grinding
capacity at Uttar Pradesh and 2.1 mt grinding capacity at Bokaro
(in JV with SAIL); taking its total cement capacity to 25.9 mt.
● We cut EPS for FY12-13 by 8-16% as we lower cement volumes,
cut sales from Noida real estate on likely slowdown from land
issues in neighbouring areas. We cut our price target by 18% to
Rs101 led by above factors and cut price target at JPVL as we
factor in potential risk of equity issuance. Maintain Outperform.
Margin improvement drives 1Q12 performance
JPA’s standalone recurring PAT at Rs1.07 bn was almost flat YoY but
11% ahead of our estimates. While revenues for its key businesses,
cement, construction and real estate, were below our estimates, the
positive surprise was led by better-than-expected margins at each of
these businesses. Construction margins were not only significantly
better on a YoY basis (on a low base of 1Q11) but were also 711 bp
higher than our estimates mainly led by execution of higher margin
Karcham Wangtoo & Yamuna expressway projects during the quarter.
Ongoing cost optimisation at its cement business led to cement
margin at 12.7%, 120 bp ahead of our estimates. Real estate margin,
at 53.4%, was also significantly ahead of our estimates.
Reported PAT witnessed a decline of 79% YoY as the company had
booked a gain of Rs4.1 bn during 1Q11 from the sale of 60 mn shares
in Jaypee Infratech (during Jaypee Infratech’s IPO).
Key developments during the quarter
During 1Q12, JPA commissioned 1 mt of cement grinding capacity at
Uttar Pradesh and 2.1mt grinding capacity at Bokaro (in JV with SAIL);
taking its total cement capacity to 25.9mt. In July 2011, JPA won two
E&C contracts worth 20.8 bn for construction of a dam, powerhouse and
other associated works of 990MW Punatsangchhu-II hydro power project
(JV project of the Royal Govt of Bhutan and Govt of India).
Cut price target and EPS for FY12-13. Maintain Outperform
We cut EPS for FY12-13 by 8-16% as we lower cement volumes, cut
sales from Noida real estate (would also impact construction sales) on
likely slowdown from land issues in neighbouring areas. We cut price
target by 18% to Rs101 led by above factors and cut in price target at
JPVL as we factor in potential risk of equity issuance. Outperform.
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