JP Associate Company Overview
JP Associates is pioneer company of Jaypee Group of Industries. The Jaypee Group is an Indian conglomerate based in Noida, India. It was founded by Jaiprakash Gaur.
It is involved in well diversified infrastructure conglomerate with business interests in Engineering & Construction, Power, Cement, Real Estate, Hospitality, Expressways, IT, Sports & Education.
This group has executed some key and well known projects in India. Some of them are mentioned below for your reference.
- Sardar Sarovar Dam and Tehri Dam
- Yamuna Expressway
- Jp Greens mega residential project
JP Associates Share Price Performance
Share Price performance is key matrix to evaluate a company. A company which is doing good over the years will have positive movement in its share price. For investors however great a company is if share prices does not move then you do not get benefited.
Below image shows the Share Price of JP Associated over the years. Note we have taken long duration to eliminate any cyclic movement
As you see below it has been a multi bagger between years 2004 and 2008. It rose from 13 off levels to 300 odd levels with in a span of 4 years. So in 4 years it have return of 25 times which is incredible.
After that period from year 2010 it has been an under performer. The stock price has tanked from 150 odd levels post 2008 crash to below 10 as of now. So it is a wealth destroyer in long term.
People investing at 2004 have lost money in past 14 years. Here I am not counting those who have invested at the top.
JP Associate a Sad story
Rakesh Jhunjhunwala has JP Assoiate in his portfolio. This is the sole reason I am covering this stock here. People visiting the portfolio section may get interested in this stock and invest money. So it is better to read about it before going ahead with the decision.
Recently the company has been in news for all the wrong reasons. JP Group is selling the cement business to reduce the debt. Last year 2017 Supreme court has barred the company directors from selling any assets.
The huge debt pile on the company is making things worse and company is finding it difficult to repay the deposit interest as well. These facts are getting reflected in share price of the stock.
JP Associates My opinion
Like I mentioned above Rakesh Jhunjhunwala has stake in the company. It may be one of the reasons for people to buy the stock. They may think it is cheap stock trading at below 10 INR so it can not fall more.
A stock price can go to 5 paise as well. So from 10 INR the stock price can fall. Personally I believe it is a risky investment and if they sell assets and get the debts issue sorted out then it may get positive movement.
It is one of the leading Real Estate company in India. If you are in IT field then you may have worked in office premises created by Unitech or heard of it.
Having said that the turn around may take time and it is risky bet. A company hunted by bad news and laws does suffer for long period of time. If you are willing to invest money then you can put some into it may be by next year after elections and hope to get returns.
But make sure you forget the investment made and think that your money is lost. I personally will not put money on such a risky company.
Conclusion
This is not a good company to invest in looking at the returns it has given in past 14 years or so. The prices are low and there is chance of improvement and potential upside to 20 to 50 levels but it is all based on how things move with respect to Debt issue.
Business alone is not a reason to invest in this stock. It is more of believing in fact that company will resolve the issue and will get back to normal paths.