Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Jaiprakash Associates interim results and balance sheet always intrigues us
on the group's philosophy for taking in new projects, as well as means for
funding the same in case operating cash flows take a breather. The latest
interims took us back to same dilemma. Operating results from all major
divisions barring construction were significantly below expectations, coupled
with consolidated balance sheet leverage now at 4:1 raising risk levels
during periods of high interest rate. While one may argue that stock has
corrected 48% percent in the last 12 months and is pricing in lot of negatives,
we would look for management cues on push-back of few large
power projects or value unlocking at a premium to make us turn positive.
With valuations of 1.2x FY12E P/B consolidated operations, retain hold.
Key takeaways from results
* EBIT rose by a mere 13% YoY to INR 6.1 bn despite the large jump in
margins in the construction (up 1230 bps YoY to 19.6%) and real estate
segments (up 1080 bps YoY to 53.4%). We are surprised JPA's cement
EBIT (INR 497/t) was lower than all peers by c40-60%.
* High interest costs at INR 4.26 bn (up 26% YoY) dragged down profits to
INR 1.07 bn (down 5% YoY). Need to wait and watch on the ECB loan maturity
as that may further increase interest costs.
Key takeaways from consol and standalone audited balance sheets
* Consolidated debt continued to remain high at INR 444 bn (up 26% YoY),
implying a debt to equity of 4.1x.
* Net working capital pressures, like most other peers, were seen by
Jaiprakash too with working capital days jumping by 20 days to 139 days in
the standalone operations.
* Standalone company's investments rose 16% to INR 64.8 bn despite sale
of equity in Jaypee Infratech, implying its continued support to subsidiaries
for their expansions. In 1Q it further increased by INR 2.5 bn.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Jaiprakash Associates interim results and balance sheet always intrigues us
on the group's philosophy for taking in new projects, as well as means for
funding the same in case operating cash flows take a breather. The latest
interims took us back to same dilemma. Operating results from all major
divisions barring construction were significantly below expectations, coupled
with consolidated balance sheet leverage now at 4:1 raising risk levels
during periods of high interest rate. While one may argue that stock has
corrected 48% percent in the last 12 months and is pricing in lot of negatives,
we would look for management cues on push-back of few large
power projects or value unlocking at a premium to make us turn positive.
With valuations of 1.2x FY12E P/B consolidated operations, retain hold.
Key takeaways from results
* EBIT rose by a mere 13% YoY to INR 6.1 bn despite the large jump in
margins in the construction (up 1230 bps YoY to 19.6%) and real estate
segments (up 1080 bps YoY to 53.4%). We are surprised JPA's cement
EBIT (INR 497/t) was lower than all peers by c40-60%.
* High interest costs at INR 4.26 bn (up 26% YoY) dragged down profits to
INR 1.07 bn (down 5% YoY). Need to wait and watch on the ECB loan maturity
as that may further increase interest costs.
Key takeaways from consol and standalone audited balance sheets
* Consolidated debt continued to remain high at INR 444 bn (up 26% YoY),
implying a debt to equity of 4.1x.
* Net working capital pressures, like most other peers, were seen by
Jaiprakash too with working capital days jumping by 20 days to 139 days in
the standalone operations.
* Standalone company's investments rose 16% to INR 64.8 bn despite sale
of equity in Jaypee Infratech, implying its continued support to subsidiaries
for their expansions. In 1Q it further increased by INR 2.5 bn.
No comments:
Post a Comment