Sell Cairn India: Indiabulls Securities

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Indiabulls Securities Research has come out with a research report on Cairn India . The research firm has changed the rating from hold to sell, in its report dated November 17, 2009.

"For Q2'10, Cairn India's (CIL's) net revenues declined 28.3% yoy to Rs 2,297.8 million. This decline was largely due to a 31.7% yoy fall in average price realisations to USD 59.6 per boe. However, the company's adjusted net profit was up 4.3% yoy to Rs 3,058 million. We are excluding the reversal of the exceptional provision of Rs 1,637.1 million for a past-profit petroleum payment pertaining to Ravva that was due to the Government of India. Accordingly we have excluded the same from Q1'10 results as well. We have valued the company using NPV of CIL's assets suggesting a target price of Rs 256 implying a discount of 8.9% on the current market price of Rs 281. Thus, we are changing our rating from hold to sell", says Indiabulls Securities Research.

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