Reduce Cairn India, target of Rs 253: Angel Broking

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Angel Broking has come out with a research report on Cairn India . The research firm has initiated coverage on the stock with reduce rating and SOTP-based target price of Rs 253/share.

"Cairn India's (CIL) stock price has spiked more than 2.5x its October 2008 lows driven by strong crude prices and gradual de-risking of the Rajasthan project. However, given our subdued outlook on long-term oil prices, we believe that the stock will underperform the markets going ahead. At current levels, the stock is discounting long-term crude prices of US $85.1/bbl, which is high and leaves no margin of safety. We believe that our long-term crude oil price assumption of US $75/bbl is sufficient to incentivise incremental production going ahead. We initiate coverage on CIL with reduce rating and SOTP-based target price of Rs 253/share", says Angel Broking.

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