Cairn India - 3QFY2013 Result Review - Angel Broking

Cairn India (CMP: Rs.340/ TP: Rs.382/ Upside: 12%)

Cairn India announced 3QFY2013 results which were slightly below our expectations. The company's top line increased 38.2% yoy to Rs.4,278cr (below our expectation of Rs.4,576cr) due to higher volumes and higher rupee realizations. The company's gross production averaged 205kbopd (+21.0% yoy) during the quarter. Although gross crude oil realization decreased by 5.0% yoy to US$96.2/bbl, INR depreciation against the USD offset this impact. Although EBITDA grew by 28.0% yoy to Rs.3,259cr in line with increase in net sales; however, EBITDA margin contracted by 33bp yoy to 76.2%.

The company recorded an exceptional forex gain of Rs.235cr on account of forex fluctuation during 3QFY2013. Excluding this exceptional gain, adjusted net profit grew by 49.0% yoy to Rs.2,921cr (slightly below our estimate of Rs.2,986cr). Reported net profit grew by 39.5% yoy to Rs.3,156cr. The company has lowered its guidance to 200-215kbopd at the end of FY14 against earlier production guidance of 240kbopd.

We maintain our Accumulate rating on the stock with a target price of Rs.382.

Source : Equity Bulls

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