Buy Aban Offshore, target of Rs 5330: Emkay Global

Emkay Global Financial Services has maintained its buy rating on Aban Offshore with a target price of Rs 5330 in its July 23, 2008 research report. "Aban offshore’s Q1FY09 excellent performance was overshadowed by the negative surprises in the FY2008 consolidated numbers. The FY2008 preexceptional consolidated net profit after minority interest Rs 3.8 billion was 17% lower than our expectation (Rs 4.5 billion). The reported net profit of Rs 1.2 billion includes Rs 1.9 billion of exchange differences on reinstatement of foreign currency debt and Rs600mn impairment of assets."

"We are still bullish on global offshore rig scenario and believe that Aban is amongst the best play on firm day rates for offshore rigs. However as mentioned earlier, we will be downgrading our earnings estimates for Aban to the extent of 10-12% for FY09 & FY10 on account of higher than expected operational cost and higher debt on its balance sheet,. There will be corresponding downgrade of our price target. We retain our BUY rating the stock, target Rs 5330," says Emkay Global Financial Services' research report.

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