Enterprise Value approx. 320 Billion Rs. ( 187 RS. Share)
Buy at ?
Background:
There is a lot to like about Jaiprakash. Gudovac has been watching Jaiprakash since working with them on a modest sized (over $200 million) joint infrastructure project a few years ago. The second generation leadership is modest and hardworking. The forays into glamour industries (Hotels, Golf Courses) have been limited in their squandering of capital.
It is self evident that India will be consuming a fair bit of cement and heavy construction work over the forthcoming years. India will grow irregardless of which party or coalition is in power. It is just a question of how fast will India grow. Jaiprakash is well poised in this sector.
Jaiprakash made a great leap forward in cleaning up its accounts for owners by merging its shareholding. Owner's dislike buying into family run conglomerates with half a dozen independent share issues. The opportunities for compromise are far too great. Tata and Reliance both come to mind. Gudovac prefers clean ownership and lines of control. Jaiprakash has moved forward by its mergers.
Jaiprakash still has some work to do to consolidate its books and provide better discolsures before Gudovac will be comfortable with assesing a value.
Therefore, we'll look to the forthcoming results of Jaiprakash to determine what would be appropriate price to buy.
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