Brokerages downgrade India's Jaiprakash Associates Shares

Updated: Jul 30 2013, 19:48pm hrs
Jaiprakash Associates LtdMorgan Stanley and Citigroup downgrade their ratings on cement maker Jaiprakash Associates Ltd. Shares Morgan Stanley downgrades Jaiprakash to "equal-weight" from "overweight", citing worsening headwinds for cement profitability, a reduced likelihood of the RBI cutting interest rates and a lack of asset sales so far to meaningfully reduce debt levels.(Reuters)
Morgan Stanley and Citigroup downgrade their ratings on cement maker Jaiprakash Associates Ltd. Shares Morgan Stanley downgrades Jaiprakash to "equal-weight" from "overweight", citing worsening headwinds for cement profitability, a reduced likelihood of the RBI cutting interest rates and a lack of asset sales so far to meaningfully reduce debt levels. Citigroup cuts the company to "neutral" and high-risk from "buy", citing "an overleveraged balance sheet, perplexing diversification and recent move by RBI to tighten liquidity." Jaiprakash reported on Monday net profit in the April-June quarter more than doubled, though that was helped mainly by one-time gain from the sale of shares in a subsidiary. Jaiprakash shares are down 2.77 percent and have lost almost 40 percent in value in the last two months on concerns about mounting interest costs.