JP Associates

Ketan Karani of Kotak Securities feels that Jaiprakash Associates, innext one and a half years, could be a multi-bagger story. It has atarget of Rs 750.Karani told CNBC-TV18, "Jaiprakash Associates is the biggest story inthe entire infrastructure space in this country. Not many peoplerealise what kind of consolidate company JP Associate is, so wouldlike to break it down for you. It is a 7 million tonne cement company,which is expanding to 13 million tonne. So by December 07, the companywill become 13 million tonne. It is putting up another 2 million withSAIL as part of its joint venture partner where it has 75%. So net-netit will become a 15 million tonne cement company by December 07."He further added, "It is the largest EPC (Engineering, Procurement andConstruction) contractor in the hydroelectric power space and webelieve that it is the largest and one of the best in the country.Around Rs 11,000-12,000 crore (Rs 110-120 billion) worth of orders arepending with it.""It has three power subsidiaries. If one takes a consolidated viewthis company would add around Rs 65 to JPs valuation per share. Butthe biggest sweetener lies in JPs Taj Expressway project. This projectcould become one of the largest property stories in the country also.We believe that the Taj Expressway Project, which is 160 km expresswayproject. It is to be built by JP from Agra to Noida. They have a rightto collect toll for 36 years. But the biggest story in the JP lies inthe 6000 acre of land, which has been allotted to them to develop thisproject. So the BOT project, which JP is doing, is going to getrevenue for 36 years from operating the highway.""But the biggest windfall for JP will come from the point of 6,000
is a bit subdued at this level. But we have confirmed understandingthat this 6000-acre of land would be available. Just to put it intoperspective, as far the valuation is concerned the market cap of JP isaround Rs 8500 crore (Rs 85 billion) as of date and if I put a valueto this land it would be Rs 18,000 crore (Rs 180 billion) only on theland value. So they are talking about almost double the size of theentire marketcap of the value of the land, which has been allotted toJP. So it could be a bigger blockbuster story, which we believe is agreat play on the infrastructure and the property sector in thiscountry.""We have a target of Rs 750 till JP expressway comes into play. Oncethe JP expressway comes into play we believe it could be Rs 1250 pershare of the JP. Because what you said companies do not get value onland but the kind of land bank this company will have and thedevelopmental rights and going forward the developmental projects,this company will do along with a cement play, which is almost 15million tonne cement, which will make it a third largest cementcompany almost in this country. We believe JP is highly under valuedits level and from now on in next one and a half years it could be amulti-bagger story in the making."Disclosure: We have discussed the whole host of sectoral plays andstocks, definitely we have advised our clients to be in all the stocksand some of the stocks would be in our personal family portfolio, sowe would be having some vested interest as far as disclosures areconcerned.--~--~---------~--~----~------------~-------~--~----~link for joining google grouphttp://groups.google.co.in",1]
);
//-->
acres of developmental land, which has been given to this company. Itis a bit subdued at this level. But we have confirmed understandingthat this 6000-acre of land would be available. Just to put it intoperspective, as far the valuation is concerned the market cap of JP isaround Rs 8500 crore (Rs 85 billion) as of date and if I put a valueto this land it would be Rs 18,000 crore (Rs 180 billion) only on theland value. So they are talking about almost double the size of theentire marketcap of the value of the land, which has been allotted toJP. So it could be a bigger blockbuster story, which we believe is agreat play on the infrastructure and the property sector in thiscountry.""We have a target of Rs 750 till JP expressway comes into play. Oncethe JP expressway comes into play we believe it could be Rs 1250 pershare of the JP. Because what you said companies do not get value onland but the kind of land bank this company will have and thedevelopmental rights and going forward the developmental projects,this company will do along with a cement play, which is almost 15million tonne cement, which will make it a third largest cementcompany almost in this country. We believe JP is highly under valuedits level and from now on in next one and a half years it could be amulti-bagger story in the making."