Goldman Sachs cuts JP Associates target price by 55%

Target price slashed because of concerns over coal supply and slow growth in cement volumes

Brokerage firm Goldman Sachs has cut JP Associates’ target price by about 55 per cent in the near term, thanks to concerns over coal supply and slow growth in cement volumes. The brokerage has brought its 12-month target price for JP Associates to Rs 37 from Rs 84 earlier, it said in a note to clients. The trigger, was the sharp fall in the stock price after a 1.45 per cent stake-sale by the group company Jaypee Infra Ventures, through block trades between September 1 and 3.

Since September 1, the stock has fallen 26 per cent. The stock is currently trading down about three per cent from Thursday’s close at Rs 35.50. “Uncertainty also exists on fuel for its cement and power businesses, pending the Supreme Court’s decision on coal block allocation,” said the note authored by analysts Pulkit Patni and Mohit Soni.

Goldman had upgraded the company’s stock in June. But since the upgrade on June 20, the share price of JP Associates has fallen 49 per cent, while the benchmark Sensex has risen nine per cent.