Jaiprakash Associates Ltd - Real estate disappoint-E&C performance led by one off - Emkay

Reco: HOLD
CMP: Rs 73
Target Price: Rs 75

- APAT Rs1.4bn -24%yoy below est (Rs1.5bn) driven by lower Real Estate (RE) EBIT Rs0.7bn v/s est Rs1.7bn & Cement EBIT Rs2.3bn v/s est Rs2.9bn. E&C- margin at 29.6% led by one offs.

- Revenues grew +2.1%yoy to Rs29.6bn, Cement grew +22% (Vol. +10% to 3.6MT & Real. +10.3% to Rs 4,354/ton), E&C -4.6% to Rs12bn incl. one off (Rs1bn). RE revenues down -52.4%.

- Lower order-book visibility & weak macro awarding are putting pressure on E&C. E&C margins driven by one offs appear unsustainable. Tied up funds for refinancing of FCCB.

- JPA in final stages of divesting stake in Cement Sub - Asset sale remains the key trigger should materialize over Q2-Q3FY13E - Maintain Hold with TP of Rs75.

Source : Equity Bulls

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