Cairn India Limited - Confident of growth - 1QFY14 Results Review - Antique

Cairn India Ltd (CIL) reported a 1QFY14 consolidated net profit of INR31.3bn, down 18% YoY, up 22% QoQ and 5% higher than our estimate due to lower exploration expense and higher other income. Average crude oil realization for the quarter was down 6% QoQ to USD94.6/bbl while RJ realization stood at USD94.3/bbl implying an 8.4% discount to Brent. Gross Rajasthan oil production rose 3% QoQ to 172.8Mbbl/d on the back of Aishwarya ramp-up while Cambay (CB-OS/2) witnessed significant 73% QoQ jump in production as a result of infill drilling. CIL's working interest oil production was up 4% QoQ to 132.1Mbbl/d. RJ production currently stands at 180Mbbl/d.

Maintain BUY with target price of INR353/sh

We assume a weaker average exchange rate of INR56.5/USD for FY14e and raise our FY14e EPS by 4%. CIL remains a preferred upstream play due to its robust production and steady earnings outlook. Reiterate BUY with INR353 target price.

Source : Equity Bulls

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