4QFY12 EBITDA/PAT above estimates: During 4QFY12, Jaiprakash Associates reported standalone revenues of
INR41b (up 4% YoY), EBITDA of INR10b (up 32 % YoY), and net profit stood of INR2.8b (down 3.3% YoY). Reported
EBIDTA/PAT is better than our estimate of INR32b and INR6.8b, respectively. Operating performance is driven
by higher EPC / RE division, while performance of Cement division was muted. Interest cost for the quarter
was higher at INR5.8b (vs INR4.5b QoQ), which negated gain on operational front. Lower Tax/PBT ratio (9%)
however arrested PAT de-growth (PBT down 19% YoY).
Cement business performance muted: Cement division sales for 4QFY12 stood at 4.25m tons (flat QoQ)
pertaining to JAL (Gujarat cement plant divested in Jaypee Cement - 100% subsidiary). Realisation / EBIDTA
for the division was up by INR25/ton and INR82/ton QoQ. EBIT for the division however stood flat at INR2.1b
owing to higher depreciation.
E&C business performance driven by higher margin: EPC division performance was driven by superior margin
(EBIT margin at 24%, while revenue down 1% YoY) due to completion of Yamuna Expressway, Karcham Wangtoo
project, etc. Real estate division revenues picked up after 3-quarters of lull performance, which along with
higher EBIT margin (45% for 4Q) led to higher positive contribution QoQ.
Focus on deleverage (consolidated FY12 net DER at 3.8x): For JPA group, the earnings/cashflows will be driven
by commissioning of projects across its cement (10m tons), power (1.5GW), infrastructure (toll road project,
INR133b cost) and real estate (traction in launches, bookings) business. JPA group plans to focus on
consolidation and de-leveraging (consolidated net DER of 3.8x as at March 2012) and is exploring various
options.
Downgrading FY13/14E estimates, maintain Buy: We marginally downgrade (2-4%) our earnings for JPA to
factor in higher interest cost, which is partially set-off due to strong cement realisation, EPC/RE business
traction. We now expect JPA to report standalone net profit of INR8.2b in FY13E (down 20% YoY) and INR11.1b
in FY14E (up 37% YoY). Maintain Buy with TP of INR103/sh.