Accumulate Cairn India; target of Rs 376: FIFL

40663 Investors following Cairn India. Share this News with them.

0

Like this story, share it with millions of investors on M3

Accumulate Cairn India; target of Rs 376: FIFL

Fortune Interfinance (FIFL) is bullish on Cairn India and has recommended accumulate rating on the stock with a target of Rs 376 in its February 1, 2012 research report.

Post your opinion here

 

0

Tweet

Share on Tumblr

RELATED NEWS Hold Kansai Nerolac; target of Rs 926: SPA Research Hold YES BANK; target of Rs 345: Unicon Investment Hold Wipro; target of Rs 439: BP Equities ALSO READ See previous views by Fortune Interfinance See what other Experts & Brokerages are saying about Cairn India See messages about Cairn India Cairn India BSE | NSE 30/05/12 Are Mutual Funds betting on Cairn India?

Fortune Interfinance (FIFL) is bullish on Cairn India and has recommended accumulate rating on the stock with a target of Rs 376 in its February 1, 2012 research report.

"Cairn reported better than expected numbers owing to lower interest expenses, higher other income on higher cash balances and over Rs3bn in forex gains. Operational performance was in line with Mangala crude production at 125,122bpd during Q3."

"CIL's Rajasthan production was stagnant since Aug'10 at 125k b/d due to lack of approvals. CIL started production from the Bhagyam (peak output 40k b/d) oil field in Rajasthan in Jan'12. Press reports indicate CIL should soon get approval to raise Mangala output to 150k b/d from 125k b/d. That would suggest exit output rate in Mar'12 should be 175k b/d as guided. On the earnings call, management also exuded confidence of getting approvals to ramp up Rajasthan production to 240k b/d in 2013. We are assuming four-year volume CAGR of 19% for CIL, driven by ramp-up in Rajasthan to 240k b/d by FY15E. CIL also appears confident of getting approvals to restart exploration in Rajasthan and for Barmer Hill pilot, which would help raise peak production rate beyond 240k b/d (probably to 300k b/d)."

"In the post results conference call, mgmt said that they are still awaiting approval for the company's reorganization involving its wholly owned subsidiaries, following which a distribution policy would be considered. We believe this would be the next key milestone for the company which could potentially reduce the uncertainty surrounding its use of cash, given significant FCF generation potential over the next few years. Net cash as on Dec-11 stood at US$1.2bn. We expect earnings to improve in the coming quarters, with incremental production from the Bhagyam field. However, post the recent strong performance, we believe stock price seems to have factored in these positives on the production front as well as on the various exploratory upsides untapped in Barmer Hills and other fields. Liberal dividend policy is likely to act as a positive catalyst for the stock, going ahead. We at FIFL believe that at the CMP of ` 339 the stock is trading at 6.78 x FY13E EPS .We maintain " Accumulate" on the stock with a target price of ` 376 based on 7.49 x FY13E EPS," says Fortune Interfinance research report.  

Institutional holding more than 40% in Indian cos

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

To read the full report click on the attachment