Sell JP Associates between Rs 25.60 & Rs 26.10. Stoploss at Rs 27 :: HDFC Securities

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Monetises two cement plants in MP… Jaiprakash Associates :: ICICI Securities, report link

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Sell Jaiprakash Associates between Rs 28.95 to 29.90. Stoploss at Rs 30.60 :: HDFC Securities

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Four coal blocks of JAL deemed illegal… :: ICICI Securities, PDF link

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Jaiprakash Associates Ltd.|Q2FY15 First Cut Analysis :: India Nivesh

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Buy JAIPRAKASH ASSOCIATES :: Kotak Securities PDF link

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JAIPRAKASH ASSOCIATES LTD
PRICE: RS.27 RECOMMENDATION: BUY
TARGET PRICE: RS.36 FY16E EV/EBITDA: 8.3X
We spoke to the company regarding recent spate of events regarding power
asset sale as well as on business performance. We believe that recent events
like stake sale by promoter group, delays in power asset sale, cancellation
of coal blocks as well as CCI probe is likely to weigh on the stock
performance and stock may continue to underperform the broader markets
despite having upside from the current levels. We revise our estimates to
factor in delays in debt reduction plans for the company as well as declining
order book for the construction division. We thus arrive at a revised price
target of Rs 36 (Rs 73 earlier) on FY16 estimates.



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Jaiprakash Associates - Mounting concerns :: Edelweiss, link

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Jaiprakash Associates’ (JPA) asset monetisation drive as well as its core operations are facing hurdles. The hydro power assets sale to Reliance Power, a critical component of the company’s debt reduction drive, is likely to be delayed. Also, the 1,320MW Nigrie thermal power plant (coal allocation case) and Noida real estate projects (Okhla bird sanctuary issue) are facing regulatory hurdles. Though high debt (INR704bn in FY14) has compelled JPA to sell quality assets, it surprisingly continues to invest in unrelated businesses. In light of the above issues, we reduce our TP to INR42.

Plagued by regulatory uncertainty

JPA’s asset monetisation drive as well as its core operations have been plagued with uncertainty. Its hydro power asset sale to Reliance Power for ~INR123bn is likely to be delayed due to regulatory issues pertaining to the 1,000MW Karcham Wangtoo project. In terms of operations, its 1,320MW Nigrie TPP, a key earnings driver, is facing uncertainty due to the pending SC judgment in the coal block allocation case. Also, the company’s real estate projects in Noida have come under a cloud post a ban on construction within 10km of the Okhla Bird Sanctuary.

Investments in unrelated businesses despite high debt a concern

The company’s consolidated net debt currently stands at INR704bn, higher by ~INR201bn since FY12. This has compelled the company to sell its quality assets-4.8MT Gujarat cement plant, 300acre Greater Noida land parcel and stop-start efforts to monetise 1,791MW hydro power assets. Moreover, it has earmarked additional assets for divestiture (500MW Bina TPP, Balaji cement plant and Bhilai cement JV) in order to pare debt. However, the company continues to invest in unrelated businesses-healthcare plans (to set up 2,000 beds across 4 cities), entry in fertilisers (INR9.1bn invested) and plans to set up semi-conductor plant in India.

Year to March	FY13	FY14	FY15E	FY16E
Revenue (INR mn)	188,164	198,344	199,458	226,246
EBITDA (INR mn)	66,099	63,756	69,465	78,401
Net profit (INR mn)	4,618	(8,248)	(1,879)	895
Diluted EPS (INR)	2.1	(3.7)	(0.8)	0.4
Diluted PE (x)	17.2	(9.6)	(42.2)	88.5
EV/ EBITDA (x)	10.3	12.5	9.1	8.2
ROE (%)	3.6	(10.3)	(1.6)	0.7

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Consider short strangle on Jaiprakash Associates :: Business Line

Jaiprakash Associates (Rs 39.5): The long-term outlook for Jaiprakash Associates remains negative till it stays below Rs 74.5. The stock is currently trading at a crucial level. It finds immediate resistance at Rs 49 and support at Rs 33 and the next critical support at Rs 28. In the near-term, Jaiprakash Associates is likely to move in a narrow range with a downward bias.

Jaiprakash Associates’ September futures shed 10 lakh shares in open interest on Friday despite a marginal gain in the stock price. In the last 10 trading sessions, open interest declined by over one crore shares. Option trading indicates a range of Rs 35-45 for the stock, as maximum number of open interest positions are in that range.

Strategy: Consider short strangle on Jaiprakash Associates using 45 call and 30 put that have closed at Re 1 and Rs 0.40 respectively. The market lot is 4,000 units/contract. This will entail a maximum profit of Rs 5,600.

Short strangle strategy is best suited when one expects range-bound movement in the underlying stock. As the maximum profit is the premium collected, we advise traders with high risk appetite to consider this strategy. Besides, the loss could be unlimited if Jaiprakash Associates swings wildly in one direction (either up or down). A close below Rs 28.5 or above Rs 46.5 will start impacting the position adversely.

In other words, only a gain of over 16 per cent from current levels or a decline of over 31 per cent will pinch traders. Also, writing option involves higher margin commitments. Maximum profit occurs if Jaiprakash Associates closes in the aforementioned range. Hold this position till expiry. Traders could exit if the loss hits Rs 4,500 in the position.

Alternatively, traders could consider shorting Jaiprakash Associate futures with a stop-loss at Rs 44 initially. If it closes below Rs 38.35, then the stop-loss can be shifted and held for a target of Rs 30. Again, risk averse traders could stay away from this strategy. The stop-loss mentioned is on underlying price and on a closing day basis.

Technicals - Adani Enterprises, LIC Housing, Andhra Bank, NMDC, Jaiprakash Associates, Gruh Finance :: Business Line

Jaiprakash Ass. - ICICI Directj

Asset monetisation need of the hour!!!
JAL’s reported net profit in Q1FY14 was above our expectations on
account of one-time profit of | 395.3 crore (pre-tax) from sale of shares of
Jaypee Infratech during the quarter. However, the net profit after
adjusting for profit on sale works out to | 24.8 crore (decline of 82% YoY).
In the cement division, volumes grew 3.1% YoY to 3.7 MT while the
realisation improved by | 90/tonne at | 4160/tonne and the EBITDA
declined by | 55/tonne to | 884/tonne in Q1FY14. Going ahead, with the
interest coverage ratio (0.9x in Q1FY14) – lowest in the last seven years,
de-leveraging of balance sheet through asset monetisation is the need of
the hour and would act as a key catalyst for the stock performance.
Disappointing Q1FY14 results…
JAL’s adjusted net profit declined 82% YoY to | 24.8 crore due to lower
margins (22.9% in Q1FY14 vs. 26% in Q1FY13), and higher interest and
depreciation cost (grew 26.8% and 10.2% YoY to | 590 crore and | 194.3
crore, respectively). The standalone cement division volumes grew 3.1%
YoY to 3.7 MT in Q1FY14. On a sequential basis, while the
realisation/tonne improved by | 89.9 to | 4160.4, the EBITDA declined
| 55 to | 884/tonne in Q1FY14. On the positive side, real estate revenues
grew 175.2% YoY to | 454.3 crore, which led to revenue beat.
Interest coverage ratio at 0.9x, debt reduction need of the hour…
The interest coverage ratio at 0.9x in Q1FY14 is at the lowest level in the
last seven years. The interest expenses pressure is expected to weigh on
earnings till some meaningful debt reduction is seen. The management
has continued to maintain that it is looking to reduce ~| 6000 crore debt
by FY14 end through asset monetisation.
Balance sheet de-leveraging holds key for stock performance…
With the interest coverage ratio (0.9x in Q1FY14), lowest in the last seven
years, de-leveraging of balance sheet through asset monetisation is the
need of the hour and would act as key catalyst for the stock performance.
We have assigned a BUY rating with an SOTP based target price of | 50
purely on the valuation (currently trading at 0.6x FY14E P/BV).

JaiPrakash Associates - Angel

For 1QFY2014, Jaiprakash Associates (JAL) posted a mixed set of numbers with
decent performance on the revenue front while adjusted earnings were lower than
our estimate owing to lower-than-expected operating performance and high
interest cost. The decent performance on the revenue front was owing to cement
revenue surprise. However, lower-than-expected performance of the construction
segment and high input cost pressure led to a decline in the blended EBITDAM.
High interest cost dents profitability: On the top-line front, the company reported
a revenue of `3,315cr for 1QFY2014, registering a growth of 10.2% yoy, which is
slightly higher than our estimate. The real estate and construction segments
posted a growth of 175.2% and 2.9% yoy respectively; however, the cement
segment’s revenue declined by 1.5% yoy. The blended EBITDA margin declined
by 345bp yoy to 23.7% and was below our expectation of 26.2%. This was mainly
due to a subdued performance in the construction segment. The interest cost
stood at `590cr a jump of 26.8%/7.5% on a yoy/qoq basis and was higher than
our estimate of `560cr. On the bottom-line front, the company reported a PAT of
`335cr, a growth of 140.9% yoy, owing to an exceptional gain of ~`395cr which
accrued on account of sale of equity shares. Adjusting to this gain, the company
has reported a loss of `61cr in 1QFY2014 vs a profit of `138cr in 1QFY2013.
This is mainly due to a lower-than-expected operating performance and high
interest cost.
Outlook and valuation: Going forward, we believe deleveraging the balance sheet
through monetization of land parcel and stake sale in cement business would help
the company in reducing its huge debt, which continues to remain an overhang on
the stock. Hence closure of such a deal would be positive for the company. We
recommend a Buy rating on the stock with a SOTP target price of `53.

Jaiprakash Associates Results ‐ a mixed bag:: Prabhudas Liladhar

! Q4FY13 ‐ a better show in sales QoQ on all fronts: Cement and EPC business
revenues were up by 11% and 20% QoQ; however, YoY down by 3% and 13.4%,
respectively. Real Estate revenues were flat QoQ but grew by 14.3% on a YoY
basis. Overall, net revenues for JPA in Q4FY13 stood at Rs38.6bn, registering a
de-growth of 4%. Despatches in Q4FY13 de‐grew by 4.6% YoY to 4mt.
Realisations at Rs4,091/tonne were up 1.7% YoY. For FY13, revenues were up
by 3% YoY and PAT plunged by a 51.2%.
! Growth in Cement EBIT/tonne, Construction margins inching to normalcy:
Cement margins managed to improve by 110bps YoY for Q4FY13 due to cost
control measures and better realisations. For FY13, the margins remained flat at
11.6%. Construction, on account of lower sales, reported a 400bps YoY decline
in margins for Q4FY13 and 150bps decline for FY13. Real estate margins at
34.7% in FY13 were down from 46.9% in FY12.
! Interest costs mainly in control, depreciation costs higher: Interest cost
declined by 5.3% YoY in Q4FY13 but grew by 3.8% QoQ. For FY13, the interest
cost was up by 13%. Depreciation costs increased by 18.2% in FY13 on the back
of 13% increase in fixed assets. Current debt stands at Rs230bn (approx.). LT
loans increased by 23% YoY to Rs189bn. NWC rose by 6.3% YoY or Rs7.6bn on
account of higher loans & advances and receivables.
! Updates: JPA is targeting to pare down the debt by Rs20-30bn through stake
sale in Gujarat cement plant and land parcels in NCR region. The company is also
planning an investment holiday in the coming year.
! Valuation & Recommendations: We have reduced our FY14/15 PAT estimates
on the back of lower cement sales and low margins, taking into account the
current slack in the cement sector. For JPA, the overhang remains in terms of
higher debt. However, a potential stake sale in JCL is expected to re-rate the
stock. We maintain ‘Accumulate’ on the stock.

Jaiprakash Associates Ltd:: Team Microsec Research

Jaiprakash Associates Ltd announced its Q3 FY13 results on 11^thFebruary 2013.

The company has posted a standalone profit of Rs 111 Crore for the third quarter ended December 31, 2012 as compared to profit of Rs 310 Crore for the quarter ended December 31, 2011. Total income has increased from Rs 2969 Crore for the quarter ended December 31, 2011 to Rs 3431 Crore for the quarter ended December 31, 2012, representing an increase of15%.

EBITDA Margin of the company decreased from 29.20% to 23.17%.Company’s margin contracted by 6.03% due to higher input costs such as fuel and logistics.

Regards,

Team Microsec Research

Technicals: Alok Ind, Hexaware, Cipla, NTPC, Jaiprakash Associates, Lakshmi Vilas Bank, Karur Vysya Bank :: Business Line

Stock Strategy: Consider short strangle on JP Associates :: Business Line

JP Associates (Rs 104.8): Despite the strong recovery in recent times, the long-term outlook for JP Associates remains negative still it stays below Rs 125. The stock is currently ruling at crucial level. It finds immediate resistance at Rs 108 and support at Rs 96 and the crucial one at Rs 85. In the near-term, JP Associates is likely to see some moderation.

F&O pointers: The JP Associates December futures witnessed an accumulation of 6.44 lakh shares in open interest. However, most of the accumulation seems to be on the short side as both current month and January futures are ruling below the spot price. Option trading indicates Rs 95-100 is crucial level, where both put and call shed open interest position.

Strategy: Consider short strangle on JP Associates using 110 call and 95 put that have closed at Rs 1.95 and Rs 1.20 respectively. The market lot is 4,000 units/ contract.

As the maximum profit is the premium collected, we advise traders with high risk appetite to consider this strategy. Besides, the loss could be unlimited if JP Associates swings wildly in one direction (up or down). In other words, only a swing of more than 10 per cent from current levels in one direction will start pinching the position. Also, writing option involves higher margin commitments. Maximum profit occurs if JP Associates closes in the range. Hold this position for at least 2 weeks.

Kotak: Top Pick - 19th November 2012

Our analysts recommend :
 

Stock Name	JAIPRAKASH ASSOCIATES LTD
Recommendation	Accumulate
Target price	Rs.98
Current Market Price	Rs. 89.15
NSE symbol	JPASSOCIAT
BSE scrip code	JAIPRA

 

Result Update: Jaiprakash Associates Ltd

• Revenues of the company in Q2FY13 came in line with our estimates, led by better than expected revenues from the construction and real estate divisions. Company has demerged the south and west cement plants and transferred it to Jaypee Cement Corporation Ltd; so correspondingly it has restated financials of Q2FY12. perating margins in Q2FY13 stood strong at 26.5% and primarily led by strong margins in construction and real estate division.
• Net profit for the quarter was slightly ahead of our estimates led by better than expected operating margins.
• At current price of Rs 91, stock is trading at 27.7x and 24.8x earnings and 12.0x and 11.9x EV/EBITDA on FY13 and FY14 estimates respectively. We maintain our FY13 estimates and also introduce FY14 estimates. We had upgraded the stock to BUY in our last recommendation at Rs 68. Owing to limited upside from the current levels, we now downgrade the stock to ACCUMULATE with a revised price target of Rs 98 on FY14 estimates (Rs 87 earlier).
  
   

JP Associates :: ShareKhan Diwali Muharat Picks 2012

Jaiprakash Associates (JP Associates), India’s leading cement and construction company, is all set to
reap the benefits of India’s infrastructure spending. The company has also monetised very well on the
real estate properties of Yamuna Expressway. The marked improvement in the macro environment has
improved accessibility to the capital and thus eased the concerns of liquidity to some extent for the
company.
Since the last couple of months, the company is under the process of selling their stake in two cement
plant located at Gujarat and Andhra Pradesh, with a total capacity of 9.8 million tonne. Any breakthrough
in the selling of these plants will be a positive trigger for the company because we believe this
deal will help the company to raise about Rs 6,000 crore, which will help it to ease burden on leverage
balance sheet. Further the company has successfully raised funds through issue of foreign currency
convertible bond of up to US $ 200 million.
We like JP Associates due to its diversified business model and aggressive expansion plans. In terms of
valuation, we value the stock using the SOTP valuation methodology and arrive at a value of Rs105 per
share.

Jaiprakash Associates - The wheel of fortune :: Edelweiss

We believe Jaiprakash Associates (JPA) offers 78% upside from the current level driven by robust 99% surge in EBITDA, led by cement and power, and supported by real estate. At near-trough EV/EBITDA of 8x, the EV is expected to rise 19%. With debt largely stable, we expect the equity values to appreciate. We highlight that the company’s EV/EBITDA multiples have contracted with rise in net debt/EBITDA and execution concerns. However, with commencement of projects and reduction of net debt/EBITDA, re-rating can potentially provide additional upsides. Our sensitivity analysis depicts a downside of 15% while higher cement margin and volume offers 125% upside, indicating favourable risk-reward. Ergo, we upgrade to ‘BUY’.

Fixed Deposit @ 12.50 % to 15.07 % p.a. - J P Associates Ltd

Now as the RBI has already started reducing the interest rates and another cut is expected in next policy review on 16th June, the high interest rates may soon be a thing of past. We have observed that all the banks & most of the corporate have already reduced the Fixed Deposit Rates but in few FD schemes the rate cut is expected in next few days..

Jaiprakash Associates (JPA) Initiate OW(V): Getting back in shape  HSBC Research,

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Jaiprakash Associates (JPA)
Initiate OW(V): Getting back in shape
 Multiple positives as expressway, new power and cement
plants start operations, driving 27% EPS CAGR over FY12e-14e
 We anticipate that JPA can successfully bring down leverage
over the next two years – a big share price catalyst
 Initiate with OW(V) and TP of INR97. Key downside risk is reinvestment
in new capacity