Selan Exploration can test Rs 500: Hemang Jani

Selan Exploration Technology can test Rs 500, says Hemang Jani of Sharekhan.

Jani told CNBC-TV18, "We like Selan Exploration Technology because it has got the rights to develop oil fields in the state of Gujarat and we think that there is going to be a very strong volume-led growth over the next 2-3 years from current production of about 2-2.25 lakh barrels, the management expects this to go upto about 5-7 lakh barrels over the next 2-3 years."
He further added, "We have also seen a strong realization improvement in the last two quarterly numbers. When you look at the valuations on most of the parameters whether on a price to earnings or on an EV to EBITDA or even on the basis of the probable reserves that the company has, the stock is quoting at a substantial discount to companies like ONGC or Cairn. Though it is a smaller capacity, the valuation gap is extremely high and the company has a very high operating profit margin. So we think that this stock can give an upside upto Rs 500 over the next 1 year." Disclosure: It will be safe to presume that I personally and my company have interest in the stocks that I have talked about.