JP Power Share: Will JP Power become a multibagger stock or will it crash, know the full details here
Jaiprakash Power Ventures share: Shares of Jaiprakash Power Ventures Limited of Jaypee Group have been declining for some time. This penny stock had reached Rs 22.8 on October 10 and from there it has fallen by more than 20 percent. Jaypee Power’s September quarter was good. Let’s know what are the future prospects of this stock.
How is the business of Jaypee Power
The foundation of Jaypee Power was laid in 1994. It is engaged in coal mining, sand mining, cement grinding and production of thermal and hydroelectric power. Jaypee Group has a diversified portfolio of power generation in hydro & thermal power sectors .
It operates, 400 MW Vishnuprayag Hydropower Station (Uttarakhand) and has constructed 300 MW Baspa II & 1000 MW Karcham Wangtoo Hydroelectric plants (Himachal Pradesh). Jaypee Power also has many power projects in Arunachal Pradesh and Meghalaya. It has a 1980 MW power station in the hydropower sector at Bara in Uttar Pradesh.
How is the management of JP Power?
How well a company will perform in the future depends largely on its management. JP Power has made several changes in its management this year. It re-appointed Suren Jain as the Managing Director (MD) and CEO of the company. The company has re-appointed Sunil Kumar Sharma as Executive Director for a period of one year from April 2024.
Praveen Kumar Singh has been re-appointed as Executive Director for a period of five years. Similarly, Dinesh Kumar Likhi has been re-appointed as Non-Executive Independent Director for a period of three years from August 6, 2024.
How much return did JP Power give?
JP Power shares have been quite sluggish for some time now. Even if we look at the data of the last 6 months, JP Power has given a negative return of 0.93 percent. In one month, investors have suffered a loss of 21.20 percent. However, in the last one year, investors have definitely made a profit of 27 percent from JP Power.
The best period of JP Power was in December 2007, when it reached the level of Rs 137. However, after that the financial condition of JP Power’s parent company – JP Group deteriorated a lot. It also defaulted on the loan, due to which JP Power also suffered a loss.
How is the valuation of JP Power?
As per valuation, JP Power has a good stock PE of around 10, which is attractive compared to rival companies. This company is in profit and its book value is Rs 17.5. If we talk about market cap, it is Rs 12.32 thousand crores. This means that the company has a lot of scope to grow.
However, there are some risk factors with JP Power. Like the promoters have pledged their 79.2 percent holding. Its return on equity has also been very low in the last three years.
Will JP Power become a multibagger stock?
There is no doubt that there is scope for growth in JP Power despite all the risk factors. If we look at its shareholding pattern, both FII and DII are continuously increasing their stake in it. This shows that JP Power has the potential to become a multibagger, that is why big foreign and domestic investors are betting on it. However, the reduction in promoter stake is a matter of concern.
According to a report by Motilal Oswal, the future of power companies is very good. In such a situation, if the problems of the parent company of JP Power are reduced and the promoters are able to make their holding debt free, then this stock can give good returns in the long term.
(This article is written for general information. Investment in the stock market is subject to risks and before making any investment, definitely take expert advice)
