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India Equity Research Reports, IPO and Stock News
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JAIPRAKASH ASSOCIATES
TARGET PRICE: Rs. 90
RECOMMENDATION: BUY
INVESTMENT RATIONALE
Robust construction order book and huge portfolio of power projects
provide revenue visibility going forward
Significant volume expansion in cement division to drive though cement
downcycle. Company expects to enhance its total cement capacity to
33MT by FY12
Successful launches from land bank in Jaypee Infratech to enhance
future cash flows
However, company’s results in Q1FY12 were in line with our estimates
but we lower our construction division revenues due to completion of
Karcham Wangtoo and likely completion of Yamuna Expressway
construction. We thus revise our estimates downwards to factor in lower
construction revenues.
Company currently has sufficient funds for pending investments in power
projects till Oct, 2011 and also holds treasury shares which can be
utilized when required.
Based on SOTP, stock provides a decent upside from the current levels
RISKS & CONCERNS
Delay in commissioning of power plants
Delay in commissioning of cement capacity
Slowdown in real estate sector
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