Cairn India - Q2FY14 Result Update - LKP Research

Cairn's Q2FY14 adjusted net profit of Rs29.6bn was lower than our estimate of Rs33.9bn. Revenue for the quarter increased by 4.7% on annual basis to Rs46.56bn (qoq +14.4%) mainly driven by rupee depreciation of 12.7%. Average gross production for the quarter was at 213kboepd (yoy +2.9%, qoq +0.4%) while average oil price realization stood at $96.7/bbl (yoy -1.4%, qoq +2.2%). Production from Rajasthan fields increased by 2.1% yoy to 175.5kbpd (qoq +1.1%). Cairn is currently producing 178kbpd from its Rajasthan fields. The management has maintained its Rajasthan exit production rate at 200-215kbpd for FY14, driven by production from Barmer Hill, NI and NE fields.

We maintain our BUY rating on Cairn with a revised SOTP based target price of Rs372. At the CMP, the stock is trading at 6.7x and 4.3x FY15e EPS and EBITDA respectively.Net revenue declines by 8.5% yoy.

Source : Equity Bulls

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