Jaypee Infratech - March 2013 Results Preview - Motilal Oswal

- Revenue, EBITDA to remain stable sequentially: We estimate revenue at INR9.7b (+5% YoY), EBITDA at INR4.8b (+11% YoY) and PAT at INR1.9b (-47% YoY). The PAT decline is attributable to higher interest and depreciation accruing from the expressway project.

- Operations to improve QoQ: We expect JPIN's sales momentum to improve after a weak 3QFY13, as there has been encouraging response in the Agra parcel in 4QFY13. We model annual sales of INR39b (v/s 9MFY13 sales of INR27b). We expect customer collections of INR8b-9b in 3QFY13.

- Re-financing to moderate CoD: JPIN has raised ~INR66b debt from IDBI Bank at favorable interest rate (12-12.75%) to repay existing high cost debt (average CoD: 14.5%) pertaining to the execution of Yamuna Expressway. The refinancing will moderate CoD by ~200bp on repaid debt i.e. ~INR60b (v/s new loan of INR66b). The overall repayment period gets extended by six years to FY31 (v/s FY25 earlier).

- Valuation and view: JPIN trades at 4x FY15E EPS of INR9.4, 0.6x FY15E BV, and at ~57% discount to our NAV estimate of INR84/share. Maintain Buy.

Source : Equity Bulls

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