Monday, March 18, 2013

Matching Up to The F1 Way...

While Stepping on The Gas to fulfil their Dream of Building India’s first f1 track, Jaypee Group is driving on The Fast Lane as a Whole. Is the party here for keeps?

A few months ago, in an interview to Business & Economy, Manoj Gaur, Executive Chairman, Jaiprakash Associates, had said, “Currently, we are on ahigh growth path.” True to his words, Jaiprakash Associates Ltd. (JAL), not only stands as the country’s 9th fastest growing company in terms of absolute growth in revenue, but also stands as the 17th fastest growing company in terms of year-on-year growth. In fact, it’s the only company other than Prism Cement, which has managed to pave its way into both the lists in this year. However, the most delighting factor for the Jaypee Group as a whole is that it is the only business house in the country, which has two of its group companies (JAL and Jaiprakash Power Venture Ltd.) among the country’s ‘fastest 20’.

Since its IPO in the year 2005, JAL has been one of the fastest growing companies in the country. But, with 75% year-on-year (y-o-y) growth in revenue from Rs.57.64 billion to Rs.100.88 billion, FY 2010 certainly has been a tremendous year for the company. But it’s not only the top line where the company has proven its mettle; JAL’s post tax profit from ordinary activities has also surged by a whopping 114% from Rs.8.97 billion to Rs.19.2 billion during the year. The key for the company’s success was certainly its good show as a truly diversified company, because almost all of its businesses have played a key role during the year in elevating the company’s total revenues past the Rs.100 billion mark.

Keeping up the good work going, as analysts from Motilal Oswal Securities estimate, JAL is well set to post a total income of around Rs.125 billion in the current fiscal. However, going by the results published by the company for the first two quarters of the year (53.6% y-o-y growth in Q1 and 64.1% y-o-y growth in Q2; both higher than market expectations), the company may again surprise everybody by posting some amazing figures, and the key contributors for the company will certainly be its real estate and cement ventures.

Talking about its real estate business, as in June 2010, the group’s cumulative real estate booking (pre-sales) had already crossed Rs.126 billion. This is commendable and most important to note, given that a large part of the sales took place over the past two years, and this makes Jaypee group an out-and-out winner in the real estate sector in NCR, which is one of the fastest growing regions in terms of real estate. And considering the fact that cumulative advances received during the period were Rs.52.5 billion (42% of bookings), Jaypee Group is certainly poised to make analysts re-estimate their forecasts.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

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