Investors should keep away from Jaypee group stocks: Mayuresh Joshi, Angel Broking

In a chat with ET Now, Mayuresh Joshi, VP-Institution of Angel Broking, shares his views on the JPA-RPower deal. Excerpts:

ET Now: JPA-RPower deal has officially been called off. Does this leave a sour taste in your mouth because this has happened twice and now there is no clarity over capacity of Karcham Wangtoo. Do you think this essentially puts a question mark over the kind of asset that they have in the first place?

Mayuresh Joshi: Yes, clearly. I do not maintain a positive outlook for the entire group. The entire group story is based on de-leveraging and unless it comes through either in the form of asset sale or in terms of their power plants or their land parcels, nothing substantial is going to turn up.

This is because interest cost is quite high for the entire group on a consolidated basis. I still maintain my stance that you should stay away from these companies from a fundamental perspective.

From a trading perspective, these companies might give you a bounce. However, unless clarity emerges in terms of the entire de-leveraging process and the cash flows improve, there is no sense in getting into these companies at this point of time.