Jaiprakash Associates shares resume up move, hit 10% upper circuit limit; time to book profit?

Jaiprakash Associates Ltd shares on Tuesday resumed their strong upward momentum after a single-day hiatus. The stock soared 10 per cent to scale its upper price band of Rs 18.17. At this price, the counter was 9.87 per cent down from its one-year high price of Rs 20.16, a level seen yesterday. That said, the penny scrip has turned into a multibagger by rallying 176.98 per cent from its 52-week low of Rs 6.56, hit on March 27, 2023.

In a BSE filing, the crisis-hit Jaypee Group's flagship firm said it has defaulted on loans worth Rs 4,258 crore, including principal and interest amount. As of October 31, JP Associates defaulted on repayments for a principal amount of Rs 1,733 crore and interest of Rs 2,525 crore.

"The total borrowing (including interest) of the company is Rs 29,272 crore, repayable by 2037, against which only Rs 4,258 crore is overdue as on October 31, 2023," the company stated. JP Associates also mentioned that it has been taking tangible steps to reduce the borrowings.

Technical analysts largely suggested that investors should book profits at current levels. Support on the counter could be seen around Rs 16.5-16 levels. Resistance is likely around the Rs 20-odd zone.

AR Ramachandran from Tips2trades said, "Jaiprakash Associates is bullish but also overbought on daily charts. It has strong support at Rs 16.5. Investors should be booking profits at current levels as a daily close below support of Rs 16.5 could lead to target of Rs 12.95 in the near term. Next resistance will be at Rs 20."

Ganesh Dongre, Senior Manager - Technical Research Analyst, Anand Rathi Shares and Stock Brokers also advised to book profits at current levels.

DRS Finvest founder Ravi Singh said, "The counter has resistance near Rs 20 level. If entering, then keep a strict stop loss placed at Rs 16."

The counter was trading higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150- and 200-day simple moving averages (SMAs). The scrip's 14-day relative strength index (RSI) came at 69.40. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a negative price-to-equity (P/E) ratio of 4.18 against a price-to-book (P/B) value of 0.71.

The scrip has a one-year beta of 1.77, indicating high volatility.

Bourses BSE and NSE have put the securities of JP Associates under the long-term ASM (Additional Surveillance Measure) framework. Exchanges put stocks in short-term or long-term ASM frameworks to caution investors about high volatility in share prices.

Around 1.44 crore shares changed hands today on BSE. The figure was lower than the two-week average volume of 2.06 crore shares. Turnover on the counter came at Rs 25.16 crore, commanding a market capitalisation (m-cap) of Rs 4,374.09 crore.

(Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.)

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