Jaiprakash Associates - 1QFY2014 Result Review - Angel Broking

For 1QFY2014, Jaiprakash Associates 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. On the top-line front, the company reported a revenue of Rs. 3,315cr for 1QFY2014, registering a growth of 10.2% yoy which is slightly higher than our estimate of Rs. 3,289cr. The real estate and construction segment posted a growth of 175.2% and 2.9% on a yoy basis respectively; however, the cement segment's revenue declined by 1.5% on a yoy basis. The Blended EBITDA margin declined by 345bp yoy to 23.7% and was below our expectation of 26.2%. This was mainly due to lower margins in the construction (19.1%) and cement segment (11.2%). Interest cost stood at Rs. 590cr a jump of 26.8%/7.5% on a yoy/qoq basis and was higher than our estimate of Rs. 560cr. Depreciation cost came in at Rs. 194cr in 1QFY2014, a jump of 10.2%/1.9% on a yoy/qoq basis. On the bottom-line front, the company reported a PAT of Rs. 335cr, a growth of 140.9% yoy, owing to an exceptional gain of ~Rs. 395cr which accrued on account of sale of equity shares. Adjusting to this gain, the company has reported a loss of Rs. 61cr in 1QFY2014 vs a profit of Rs. 138cr in 1QFY2013. This is mainly due to a lower-than-expected operating performance and high interest cost.

Currently the target price is under review. However due to recent fall in the stock price we maintain our Buy rating on the stock.

Source : Equity Bulls

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