Wednesday, August 8, 2012

Yamuna Expressway is ready, says Jaypee Infra

The 165-km Yamuna Expressway is ready for commercial operation, the company that built the road, Jaypee Infratech, has said.
The road, built at a cost of Rs 12,839 crore, runs along the Yamuna river, connecting the industrial town of Noida and Agra. The tolled road is expected to reduce traffic congestion on the National Highway 2.
According to the terms of the concession agreement, Jaypee Infratech is entitled to collect tolls at rates fixed by the Uttar Pradesh Government for 36 years. In addition, the company will receive 6,175 acres of land across five different sites at the Government’s cost of acquisition, paying only an annual lease rent of Rs 41 per acre.
A research report of Angel Research, issued today, has said it has assumed a toll of Rs 1.5 per km. The report has noted that the commencement of the Yamuna Expressway (YE) is a trigger for the stock.
However, the report observes that the Yamuna Expressway faces competition from the existing highway NH-2, which is currently toll-free. While plans are afoot to make it a six-lane road, after which it will be tolled, the reluctance of commuters to use the Yamuna Expressway could impair its profitability.
Currently JPinfratech is trading at Rs.56..I advice my clients to go long on stock with a 2 year perspective for a target of 160-180