Views on Cairn India 3QFY2014 result - Angel Broking

Views of Mr. Bhavesh Chauhan (Sr. Research Analyst – Oil & Gas, Angel Broking) on Cairn India 3QFY2014 result:

Cairn India 3QFY2014 Result Review (CMP:`325/ Target Price: Under Review/ Recommendation: Buy)

"Cairn India 3QFY2014 top-line and EBITDA were slightly above our expectations; however, its adjusted net profit was below our estimate due to lower than expected other income and higher than expected tax rate. The company's top line increased by 16.9% yoy to Rs 5,000cr (above our expectation of Rs 4,952cr) due to increases in both volumes as well as realizations. The company's gross production averaged 224,493boepd (+10.0% yoy) during the quarter. Gross crude oil realization stood flat yoy to US$96.3/bbl (although it increased in INR terms due to Rupee depreciation against the USD). EBITDA grew by 17.1% yoy to Rs 3,848cr in line with increase in top-line. The company recorded an exceptional item related to valuation of stock options of Rs 155cr during 3QFY2014. Other income decreased by 22.7% yoy to Rs 140cr (below our expectations) and tax expenses grew by 256.7% yoy to Rs115cr. Hence, despite 17.1% yoy growth in EBITDA, adjusted net profit grew by only 4.1% yoy to Rs 3,039cr (below our estimate of Rs 3,291cr). We maintain our Buy rating on the stock while we keep our target price under review."

Source : Equity Bulls

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