Strong real estate revenues propel Jaiprakash Associates profit in Q3

Strong real estate revenues propel Jaiprakash Associates profit in Q3
The Hindu Business Line, January 19, 2010, Page 2

Our Bureau, New Delhi

Buoyed by stronger real estate revenues and better price realisation for its cement business, Jaiprakash Associates Ltd (JAL) announced on Monday that it had more than doubled its net revenue for the third quarter ended December 31, 2009 – to Rs 2,964 crore from Rs 1,417 crore.

Net profit stood at Rs 103 crore down by 38 per cent as compared to Rs 168 crore in the same quarter last fiscal. However, this includes the expenses made under the “Jaypee Employee Stock Purchase Scheme, 2009”. The company had issued 1.25 crore equity shares to a trust for the employees and as per SEBI guidelines the difference between the market price and face value had to shown in the accounts. The Chief Financial Officer, Mr Rahul Kumar, said that this expense is a notional expense and has no impact on the company's operating margins.

If the expense for the Employee Stock Purchase Scheme is not taken into account, the net profit stood at Rs 314 crore, almost 87 per cent higher than Rs 168 crore in the same quarter last year.

Mr Kumar added that the company's strong performance has been boosted by its cement business and he expects cement prices to firm up in the coming months, “In the first nine months of this fiscal, price realisation is Rs 500/tonne higher than it was in the same period last fiscal. While construction continues to be our greatest revenue contributor, cement is catching up fast.”

The company is expanding its cement production capacity. The capacity has gone up from 9.5 million tonnes at the beginning of the year to 15 mt. Mr Kumar said by the end of the fiscal, another five mt would be added from greenfield projects. “The cement grinding joint venture with SAIL in Bhilai would be commissioned in the next three months. This would add two mt per annum capacity to our current capacity,” said Mr Kumar.

Giving his expectations for the next quarter, Mr Manoj Gaur, Chairman, Jaiprakash Associates, said, “We are on course to reach Rs 10,000-crore turnover for the year. Already we have sold 12.5 million sq ft of real estate area and we expect to sell another 5-6 million sq ft in the next quarter. As the economy is growing I believe we would be able to maintain the momentum in revenue and profitability.”

The company's share price on the Bombay Stock Exchange closed at Rs 163.25 on Monday, down 1.25 per cent from Rs 164.50 at the previous close.