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Saturday, July 30, 2005

Sharekhan - Jaiprakash Associates


Jaiprakash Associates 
Cluster: Ugly Duckling
Recommendation: Buy
Price target: Rs291
Current market price: Rs246

Price target revised

Result highlights
  • Jaiprakash Associates Ltd's (JAL) net revenues grew by 12% year on year (yoy) in Q1FY2006 to Rs817 crore.
  • Its cement revenues grew by 25% driven by a volume growth of 23% and a realisation growth of 2% during the quarter.
  • The construction revenues grew by 5.6% yoy to Rs548 crore driven by a strong order backlog of Rs6,800 crore as on June 30, 2005.
  • The operating profit margin (OPM) rose by 100 basis points to 19% during the quarter. The growth was driven by the strong volume growth in the cement business and savings in power costs.
  • The profit before tax (PBT) increased to Rs96 crore, up 19% quarter on quarter (qoq), while the profit after tax (PAT) increased to Rs54 crore. The PAT saw a marginal growth of 4% primarily because of a higher tax outgo.
  • During the quarter the company sold off its 36.6% stake in Jaiprakash Hydro Power Ltd (JHPL) and realised a profit of Rs360 crore.