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3QFY12 operating performance above estimates: During 3QFY12, JPA reported revenues of INR33.1b (up 14%
YoY), EBIDTA of INR8.2b (up 3% YoY) and net profit of INR2.1b (down 12% YoY). This is above our estimates of
INR1.4b. EBIDTA too was higher than our estimate of INR7.0b. Better than estimated performance is driven by
strong performance of Cement business, claims receipt towards group EPC project boosting EPC profits
(Karcham Wangtoo, etc) and higher dividend income from Jaypee Infratech (large part of other income,
attributable could be INR1.2b+). Thus, the better than estimates were driven partly by operating performance
and partly aided by one-offs.
Cement business performance robust: Cement division volumes stood at 4.25m tons (up 17% YoY), while
realisation improved by INR765/ton and EBIDTA by INR500/ton+ QoQ, leading to EBIT of INR1.7b, vs negative
EBIT of INR295m in 2QFY12. EPC business too recorded higher margins at 30%, owing to claims receipt. EBIT for
division stood at INR3.7b, vs INR2.7b YoY. Real estate division however saw bit moderation with revenues of
INR3.1b (down 28% YoY), while EBIT stood at INR1.5b (down 50% YoY)
E&C business: prior claims boost EPC margin: E&C revenues at INR12.5b, flat YoY; as several large scale projects
are competed, near completion (Yamuna Expressway, F1 circuit, Karcham Wangtoo, etc). Margins in E&C
however stood at 29.8% (up 840bp YoY), and was higher than estimates.
Upgrading FY12/13E estimates, maintain Buy: We have upgraded our FY12/13E earnings estimate for JPA by 8%
and 25%, respectively to factor in superior performance for Cement business (FY12/13E), one-off gains in EPC
division and higher other income (FY12E). We value JPA on SOTP and arrive at TP of INR106/sh, comprising of:
Cement business at INR75/sh (6x FY13E EV/EBIT and balance capacity at USD110/ton), EPC business at INR39/
sh (8x FY13E EV/EBIT), Jaiprakash Power at INR38/sh (based on our TP of INR46/sh), Jaypee Infratech at INR30/
sh (based on our TP of INR55/sh), other Real Estate (Jaypee Greens, Land at NOIDA, etc) at INR11/sh less net
debt on books (less of cash, investment valued at BV in other subsidiaries) at INR87/sh. Maintain Buy.
3QFY12 operating performance above estimates
During 3QFY12, JPA reported revenues of INR33.1b (up 14% YoY), EBIDTA of INR8.2b
(up 3% YoY) and net profit of INR2.1b (down 12% YoY). This is above our estimates
of INR1.4b. EBIDTA too was higher than our estimate of INR7.0b. Better than
estimated performance is driven by strong performance of Cement business,
claims receipt towards group EPC project boosting EPC profits (Karcham Wangtoo,
etc) and higher dividend income from Jaypee Infratech (large part of other income,
attributable could be INR1.2b+). Thus, the better than estimates were driven partly
by operating performance and partly aided by one-offs.
Cement business performance was robust with EBIT of INR1.7b, vs loss of INR295m
in 2Q. This is driven by robust realisation growth, vs moderate cost increase.
Similarly, the EPC business has EBIT of INR3.7b, vs INR2.7b YoY, led by past claims
receipt. Real Estate business witnessed bit moderation with EBIT declining to
INR1.5b, vs INR2.9b YoY.
Interest cost for JPA stood at INR4.5b, up 33% YoY led by commissioning of cement
capacity, while depreciation for the quarter stood at INR2b (vs INR1.5b YoY and
INR1.8b QoQ). Lower Tax/PBT ratio for the quarter represents distorted picture
and adjusted for tax free dividend receipt, tax/PBT ratio stood at 49%, in sync with
42% in 2Q and 40% in 1Q. This is owing to higher deferred tax provisions.
Cement Business: volume up 17% YoY; EBIDTA up sizably (INR500/ton+
QoQ)
During 3QFY12, cement business revenues stood at INR17b, up 37% YoY; led by
increase in volumes as well as realizations. Volumes stood at 4.25m tons (vs 3.6m
tons in 3QFY11 and 4.1m ton in 2QFY12), while realizations stood at INR3,994/ton
(vs INR3,411/ton in 3QFY11 and INR3,229/ton for 2QFY12).
EBIDTA for the quarter thus stood at INR811/ton, significantly higher than INR306/
ton in 2QFY12 and compares with INR723/ton in 3QFY11. Realisation for the division
was up ~INR765/ton QoQ, while cost increases stood at INR260/ton QoQ, leading
to EBIDTA improvement of INR500/ton+ QoQ.
Thus, despite higher depreciation on capacity commissioning, EBIT for cement
division increased 19% YoY at INR1.7b, translating into EBIT of INR400ton in 3QFY12
vs INR392/ton in 3QFY11 (and negative EBIT of INR72/ton in 2QFY12).
We understand that cement capacity now stands at 28m tons (up from 26m tons as
at end-FY11), while management expect installed capacity to reach 33m tons by
March 2012.
Upgrading FY12/13E estimates, maintain Buy
We have upgraded our FY12/13E earnings estimate for JPA by 8% and 25%,
respectively to factor in superior performance for Cement business (FY12/13E),
one-off gains in EPC division and higher other income (FY12E).
We now expect JPA to report standalone PAT of INR7.8b in FY12E (up 5% YoY) and
INR8.8b in FY13E (up 14% YoY). At the CMP, the stock trades at a PER of 20.7x on
FY13E basis.
We value JPA on sum of parts methodology and arrive at TP of INR106/sh, comprising
of: Cement business at INR75/sh (6x FY13E EV/EBIT and balance capacity at USD110/
ton), EPC business at INR39/sh (8x FY13E EV/EBIT), Jaiprakash Power at INR38/sh
(based on our TP of INR46/sh), Jaypee Infratech at INR30/sh (based on our TP of
INR55/sh), other Real Estate (Jaypee Greens, Land at NOIDA, etc) at INR11/sh less
net debt on books (less of cash, investment valued at BV in other subsidiaries) at
INR87/sh. Maintain Buy.
Visit http://indiaer.blogspot.com/ for complete details �� ��
3QFY12 operating performance above estimates: During 3QFY12, JPA reported revenues of INR33.1b (up 14%
YoY), EBIDTA of INR8.2b (up 3% YoY) and net profit of INR2.1b (down 12% YoY). This is above our estimates of
INR1.4b. EBIDTA too was higher than our estimate of INR7.0b. Better than estimated performance is driven by
strong performance of Cement business, claims receipt towards group EPC project boosting EPC profits
(Karcham Wangtoo, etc) and higher dividend income from Jaypee Infratech (large part of other income,
attributable could be INR1.2b+). Thus, the better than estimates were driven partly by operating performance
and partly aided by one-offs.
Cement business performance robust: Cement division volumes stood at 4.25m tons (up 17% YoY), while
realisation improved by INR765/ton and EBIDTA by INR500/ton+ QoQ, leading to EBIT of INR1.7b, vs negative
EBIT of INR295m in 2QFY12. EPC business too recorded higher margins at 30%, owing to claims receipt. EBIT for
division stood at INR3.7b, vs INR2.7b YoY. Real estate division however saw bit moderation with revenues of
INR3.1b (down 28% YoY), while EBIT stood at INR1.5b (down 50% YoY)
E&C business: prior claims boost EPC margin: E&C revenues at INR12.5b, flat YoY; as several large scale projects
are competed, near completion (Yamuna Expressway, F1 circuit, Karcham Wangtoo, etc). Margins in E&C
however stood at 29.8% (up 840bp YoY), and was higher than estimates.
Upgrading FY12/13E estimates, maintain Buy: We have upgraded our FY12/13E earnings estimate for JPA by 8%
and 25%, respectively to factor in superior performance for Cement business (FY12/13E), one-off gains in EPC
division and higher other income (FY12E). We value JPA on SOTP and arrive at TP of INR106/sh, comprising of:
Cement business at INR75/sh (6x FY13E EV/EBIT and balance capacity at USD110/ton), EPC business at INR39/
sh (8x FY13E EV/EBIT), Jaiprakash Power at INR38/sh (based on our TP of INR46/sh), Jaypee Infratech at INR30/
sh (based on our TP of INR55/sh), other Real Estate (Jaypee Greens, Land at NOIDA, etc) at INR11/sh less net
debt on books (less of cash, investment valued at BV in other subsidiaries) at INR87/sh. Maintain Buy.
3QFY12 operating performance above estimates
During 3QFY12, JPA reported revenues of INR33.1b (up 14% YoY), EBIDTA of INR8.2b
(up 3% YoY) and net profit of INR2.1b (down 12% YoY). This is above our estimates
of INR1.4b. EBIDTA too was higher than our estimate of INR7.0b. Better than
estimated performance is driven by strong performance of Cement business,
claims receipt towards group EPC project boosting EPC profits (Karcham Wangtoo,
etc) and higher dividend income from Jaypee Infratech (large part of other income,
attributable could be INR1.2b+). Thus, the better than estimates were driven partly
by operating performance and partly aided by one-offs.
Cement business performance was robust with EBIT of INR1.7b, vs loss of INR295m
in 2Q. This is driven by robust realisation growth, vs moderate cost increase.
Similarly, the EPC business has EBIT of INR3.7b, vs INR2.7b YoY, led by past claims
receipt. Real Estate business witnessed bit moderation with EBIT declining to
INR1.5b, vs INR2.9b YoY.
Interest cost for JPA stood at INR4.5b, up 33% YoY led by commissioning of cement
capacity, while depreciation for the quarter stood at INR2b (vs INR1.5b YoY and
INR1.8b QoQ). Lower Tax/PBT ratio for the quarter represents distorted picture
and adjusted for tax free dividend receipt, tax/PBT ratio stood at 49%, in sync with
42% in 2Q and 40% in 1Q. This is owing to higher deferred tax provisions.
Cement Business: volume up 17% YoY; EBIDTA up sizably (INR500/ton+
QoQ)
During 3QFY12, cement business revenues stood at INR17b, up 37% YoY; led by
increase in volumes as well as realizations. Volumes stood at 4.25m tons (vs 3.6m
tons in 3QFY11 and 4.1m ton in 2QFY12), while realizations stood at INR3,994/ton
(vs INR3,411/ton in 3QFY11 and INR3,229/ton for 2QFY12).
EBIDTA for the quarter thus stood at INR811/ton, significantly higher than INR306/
ton in 2QFY12 and compares with INR723/ton in 3QFY11. Realisation for the division
was up ~INR765/ton QoQ, while cost increases stood at INR260/ton QoQ, leading
to EBIDTA improvement of INR500/ton+ QoQ.
Thus, despite higher depreciation on capacity commissioning, EBIT for cement
division increased 19% YoY at INR1.7b, translating into EBIT of INR400ton in 3QFY12
vs INR392/ton in 3QFY11 (and negative EBIT of INR72/ton in 2QFY12).
We understand that cement capacity now stands at 28m tons (up from 26m tons as
at end-FY11), while management expect installed capacity to reach 33m tons by
March 2012.
Upgrading FY12/13E estimates, maintain Buy
We have upgraded our FY12/13E earnings estimate for JPA by 8% and 25%,
respectively to factor in superior performance for Cement business (FY12/13E),
one-off gains in EPC division and higher other income (FY12E).
We now expect JPA to report standalone PAT of INR7.8b in FY12E (up 5% YoY) and
INR8.8b in FY13E (up 14% YoY). At the CMP, the stock trades at a PER of 20.7x on
FY13E basis.
We value JPA on sum of parts methodology and arrive at TP of INR106/sh, comprising
of: Cement business at INR75/sh (6x FY13E EV/EBIT and balance capacity at USD110/
ton), EPC business at INR39/sh (8x FY13E EV/EBIT), Jaiprakash Power at INR38/sh
(based on our TP of INR46/sh), Jaypee Infratech at INR30/sh (based on our TP of
INR55/sh), other Real Estate (Jaypee Greens, Land at NOIDA, etc) at INR11/sh less
net debt on books (less of cash, investment valued at BV in other subsidiaries) at
INR87/sh. Maintain Buy.
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