Edelweiss maintains 'buy' rating on Jaiprakash Associates
Edelweiss Securities has maintained a ‘buy’ rating on Jaiprakash Associates (JPA) .
JAIPRAKASH ASSOCIATES
RESEARCH: EDELWEISS SECURITIES
RATING: BUY
CMP: Rs 168
Edelweiss Securities has maintained a ���buy��� rating on Jaiprakash Associates (JPA) . Since November ���07, of the total 4.7 million sq ft that it owns, JPA has been able to sell 2.9 million sq ft in Greater Noida and 3.6 million sq ft in Noida, till date. Supported by its low land acquisition cost, the company is offering properties at various price points to ensure offtake.
Accordingly, sales price varies from ~Rs 5,500-10 ,000/sq ft in Greater Noida and Rs 4,800-6 ,400/sq ft in Noida. The company has received Rs 900 crore in cash at Greater Noida and Rs 590 crore at Noida. JPA has completed sub-contracting for the project and has finalised 24 sub-contractors .
The management has guided that the expressway will be available for commuting in time for the Commonwealth Games. JPA will retain project planning, equipment ordering and raw material procurement. Financial closure for the project is complete and land and forest clearances have been secured. The management has highlighted its intent to bring all the power entities under one fold.
It indicated the need for infusing $500 million by September ���09, for which, it is considering various options like securitising operational power plants. The company reiterated its intent to convert first warrant issue (~ Rs 1,985 crore at Rs 397/share; Rs 400 crore put in till date).
To tackle concerns of the open offer, following the second warrant conversion (~ 10% dilution), it plans to defer shareholders meeting to extend conversion window till FY11E. After factoring in concerns over further cement price correction this year in the northern market, Edelweiss has lowered its EPS by 18.6% in FY09E and 23.3% in FY10E. While earnings growth is likely to remain moderate in the near term, long-term value remains in the stock.
RESEARCH: EDELWEISS SECURITIES
RATING: BUY
CMP: Rs 168
Edelweiss Securities has maintained a ���buy��� rating on Jaiprakash Associates (JPA) . Since November ���07, of the total 4.7 million sq ft that it owns, JPA has been able to sell 2.9 million sq ft in Greater Noida and 3.6 million sq ft in Noida, till date. Supported by its low land acquisition cost, the company is offering properties at various price points to ensure offtake.
Accordingly, sales price varies from ~Rs 5,500-10 ,000/sq ft in Greater Noida and Rs 4,800-6 ,400/sq ft in Noida. The company has received Rs 900 crore in cash at Greater Noida and Rs 590 crore at Noida. JPA has completed sub-contracting for the project and has finalised 24 sub-contractors .
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The management has guided that the expressway will be available for commuting in time for the Commonwealth Games. JPA will retain project planning, equipment ordering and raw material procurement. Financial closure for the project is complete and land and forest clearances have been secured. The management has highlighted its intent to bring all the power entities under one fold.
It indicated the need for infusing $500 million by September ���09, for which, it is considering various options like securitising operational power plants. The company reiterated its intent to convert first warrant issue (~ Rs 1,985 crore at Rs 397/share; Rs 400 crore put in till date).
To tackle concerns of the open offer, following the second warrant conversion (~ 10% dilution), it plans to defer shareholders meeting to extend conversion window till FY11E. After factoring in concerns over further cement price correction this year in the northern market, Edelweiss has lowered its EPS by 18.6% in FY09E and 23.3% in FY10E. While earnings growth is likely to remain moderate in the near term, long-term value remains in the stock.
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