Jaiprakash Associates - Q4FY12 Result Update - Emkay

Jaiprakash Associates Ltd
Reco: HOLD
CMP: Rs 68
Target Price: Rs 75

Asset sale to lower leverage remains key trigger

- APAT Rs 2.8bn (+13% yoy) significantly above est (Rs 1.98bn) Driven by E&C EBIT at Rs4.2bn v/s est of Rs 2.7bn - margin at 23.9% higher than estimates of 18%

- Standalone revenues flat at Rs 40.3bn (+1% yoy), Cement grew 7% yoy to Rs 16.9bn, E&C down 1% to Rs 17.7bn, Real Estate(RE) down 6%yoy to Rs 5.6bn

- JPA hives off Gujarat & AP cement assets in separate sub to reduce leverage. Partial stake sale or complete asset sale of Gujarat unit (capacity ~5MTPA, output 3 MT in FY12) on cards

- Lower FY13E EPS by 8% to factor in lower cement volumes & lower TP to Rs75. Valuations at 9.4X FY13 EV/E leaves little upside. Maintain HOLD. Asset sale remains key trigger.

Source : Equity Bulls

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