CMP: Rs 204
Target Price: Rs 325
Prabhudas Lilladher has maintained an ‘outperformer’ rating on Jaiprakash Associates while lowering the target price by 32% from Rs 430 to Rs 325. The lower target price is primarily due to the fall in the valuation of Jaypee Infratech. “On the side of conservatism, we now value Jaypee Infratech at 30% discount to its NAV due to the recent negative sentiment in the market. This at current levels of Rs 250 presents an upside of 30%,” says the report. The brokerage also acknowledges the fact that the stock of Jaiprakash Associates’ corrected 50% from its recent peak due to a weak market coupled with the confusion on its holding in Jaypee Infratech. The brokerage believes that value unlocking potential with regards to JP Power Ventures, awarding land to Jaypee Infratech and potential value from the Ganga-Balia Expressway would act as triggers to Jaiprakash Associates.