>Jaiprakash Power Ventures (ICICI DIRECT)

In FY10, Jaiprakash Power Ventures reported ~2% YoY de-growth in topline to Rs 691 crore compared to our expectation of Rs 705 crore. On the volume front, JP Power has delivered de-growth of ~1.3% YoY from 3,325 MU to 3,281 MU in line with our expectation. Due to the merger of two amalgamating entities i.e. JP Hydro and JP Power Ventures during the course of FY10 the performance of the resultant company is comparable with the previous year.

■ Plans progressing well
Jaiprakash Hydro Power is on track to commission the Karcham Wangtoo project ahead of schedule and is likely to commence generation in H1FY11E. Post the commissioning of Karcham
Wangtoo project in FY12E the company will have an install hydro power capacity of 1,700 MW under its belt. J P Power holds in excess of 56% stake in Karcham Wangtoo project.

■ Carbons credits scene improving in the international markets
Since April 10, the carbon credit prices in international markets has improved significantly if the prices are able to sustain at these levels it will benefit the upcoming hydro expansion lined up in FY12E.

■ Demonstrated EPC capability of parents adds the edge
Jaypee Associate, the parent company, has demonstrated leadership in the construction of hydro power projects over 2002- 2009 with an execution track record of over ~8,800 MW.

Valuation
At the CMP of Rs 65, the stock is trading at P/BV of 3.8x of FY11E and 3.3x of FY12E. We are reiterating our SOTP based target of Rs 71 based on the great execution track records of the parent and major expansions lined up in FY12E. We reiterate our price target of Rs 71 with an ADD rating.

To read the full report: JAIPRAKASH POWER VENTURES