Brokerages downgrade India's Jaiprakash Associates

Last Updated: Tue, Jul 30, 2013 08:12 hrs

Morgan Stanley and Citigroup downgrade their ratings on cement maker Jaiprakash Associates Ltd.

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.

More from Sify: