However, we see significant value over the medium term in the stock. We continue to value the stock using the SOTP methodology and value it at Rs 151 per share. We have valued the company’s cement division at an implied EV/ tonne of US$103 per tonne, construction business at 6x FY12 EV/EBITDA, power division using FCFE methodology and Jaypee Infratech at a 20%discount to current market price. We maintain our STRONG BUY recommendation on the stock.
Wednesday, 28 July 2010
Jaiprakash Associates
ICICI Direct has recommended buy rating on Jaiprakash Associates with a target of Rs 151 in its July 27, 2010 research report.
At the CMP, the stock is trading at 23.5x FY12 earning estimates and 2.7x FY12 P/BV. We have downgraded our earnings estimates and expect the stock to remain range bound in the near term due to volatility in the construction division margin, higher interest & depreciation expenses.
However, we see significant value over the medium term in the stock. We continue to value the stock using the SOTP methodology and value it at Rs 151 per share. We have valued the company’s cement division at an implied EV/ tonne of US$103 per tonne, construction business at 6x FY12 EV/EBITDA, power division using FCFE methodology and Jaypee Infratech at a 20%discount to current market price. We maintain our STRONG BUY recommendation on the stock.
However, we see significant value over the medium term in the stock. We continue to value the stock using the SOTP methodology and value it at Rs 151 per share. We have valued the company’s cement division at an implied EV/ tonne of US$103 per tonne, construction business at 6x FY12 EV/EBITDA, power division using FCFE methodology and Jaypee Infratech at a 20%discount to current market price. We maintain our STRONG BUY recommendation on the stock.
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