Cairn India Q1 profit seen down 12% at Rs 549cr: Motilal Oswal

Motilal Oswal has come out with its first quarter (April-June) earnings estimates for the oil & gas sector. The brokerage house expects Cairn India to report a 12.2 percent degrowth quarter-on-quarter (degrowth of 34.2 percent year-on-year) in net profit at Rs 549.5 crore.Sales are expected to increase by 23.5 percent Q-o-Q (down 19.3 percent Y-o-Y) to Rs 2120.9 crore, according to Motilal Oswal.Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to rise by 80.5 percent Q-o-Q (down 29.7 percent Y-o-Y) to Rs 965.1 crore.Motilal Oswal's report on Cairn IndiaWe expect CAIR to report consolidated net sales of Rs 21 billion in 1QFY17 (v/s Rs 26 billion in 1QFY16 and Rs 17 billion in 4QFY16). Net sales are likely to increase Q-o-Q, led by crude price—Brent average price is up 34 percent Q-o-Q (down 26% Y-o-Y).We estimate consolidated EBITDA at Rs 9.7 billion v/s Rs 13.7 billion in 1QFY16 and Rs 5.3 billion in 4QFY16.We expect CAIR’s 1QFY17 Rajasthan production at 117.9kboepd v/s 120.5kboepd in 1QFY16 and 117.4kboepd in 4QFY16.We model Brent crude price of USD50/bbl for FY17, USD55/bbl for FY18 and USD55/bbl for the long term, and take a quality discount of 15 percent for CAIR.Disclaimer: The views and investment tips expressed by investment experts 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.