Annual Report Analysis - Jaiprakash Associates ::Edelweiss,

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��

Jaiprakash Associates’ (JPA) FY11 annual report highlights that revenue and profitability surged on back of the real estate/ infrastructure segment; however, this also led to an increase in debtors exceeding six months. Profit on sale of shares in subsidiary and charging of redemption premium on NCDs/FCCBs through reserves resulted in higher reported profitability. With significant committed capex of ~ INR 503  bn and high debt-equity at 4.1x,  we believe asset/ treasury share monetisation and equity dilution hold the key for funding future capex.  

Revenue jump driven by real estate/ infra segment…

·         JPA revenue and EBIDTA surged from INR 65.2 bn and INR 21.9 bn, respectively, in FY10 to INR 112.6 bn and INR 47.3 bn, respectively, in FY11. The jump was primarily on back of real estate/ infrastructure segment revenue catapulting from INR 6.8 bn in FY10 to INR 42.8 bn in FY11.

… However, cash flow remained subdued

·         Cash flow from operations post interest remained subdued at negative INR 0.4 bn despite a reported PBT of INR 30.9 bn.

·         Debtors exceeding six months jumped significantly from INR 4.2 bn in FY10 to INR 17.0 bn in FY11

Redemption premium on NCDs/ FCCB kept off P&L

·         During FY11, JPA charged redemption premium of INR 2.9 bn (9.4% of PBT) on debentures directly through reserves.

·         As at FY11 end, the company has outstanding two tranches of FCCB of INR 25.1 bn, also, JPVL, a subsidiary had outstanding FCCB of INR8.9 bn. The redemption premium has been charged to reserves; had the company charged the same through P&L on YTM basis, PBT for the year would have been lower by INR 2.0 bn (6.5% of PBT).

·         Total interest cost incurred for FY11 stood at INR 42.3 bn (excl. redemption on FCCB/ NCDs), of which INR 25.6 has been capitalised.

Jaypee Infratech IPO boosts profit / networth

·         During FY11, Jaypee Infratech (JPI), a subsidiary, had made a IPO by issuing 222.9 mn equity shares of INR 10 each at a premium of INR 92/ share.JPA sold 60 mn equity shares of JPI in the IPO and recognised a profit of INR 5.1 bn (16.5% of PBT). 

·         Capital reserve during FY11 increased by INR 6.3 bn which we believe is primarily on account of deemed divesture gains of JPI IPO.