Jaiprakash - Update - Finquest bullish on JP Associates

Q: JP Associates has been hammered out of shape over the past few days. Would you initiate a buy call or is there still some pain left in the stock?

A: General investors would look at buying at these levels because a lot of concerns were overplayed on the 45% stake sale buzz. Post that, we need to take consolation from the management. They have given a pure clarification that such a move will not be initiated.

So, a lot of selling is appearing under counter. But for those with a perspective of 6-12 months, it makes good sense to buy at this level. We were seeing a lot of embedded value where things could get postponed. But with respect to the management saying they are going ahead with their power IPO, that is now in place. The only thing is that the valuation has got de-rated for the entire power sector. So to that extent, we could see lesser embedded value could be unlocked from there.

The stock has corrected almost 50% from the peak. It makes sense for a long-term investor. Other than the construction story, everything is in place. We are not seeing any concern on that front. It is more of a sentimental play. So, as selling pressure gets receded, the stocks could start performing.



Link to the article: http://www.moneycontrol.com/india/news/market-outlook/finquest-bullishjp-associates-jk-b/21/09/327126