Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Oil and Gas
Cess on crude production increased to Rs4,500/mt; downgrade Cairn, OIL and ONGC to Hold
In the Union Budget 2012-13, the government increased the OIDA cess on crude oil production from Rs2,500/mt earlier to Rs4,500/mt. The earlier revision in cess happened during the Budget 2006-07. This increase in cess is attributed to indexation by the government. We believe that the increase in cess (keeping all the other variables constant) is likely to impact the upstream companies significantly with downward revision in earnings of 10%+ for FY13E and FY14E. Although, cess is cost recoverable while calculating the profit petroleum for the upstream companies, the absolute impact in earnings would be still substantial.
m We have changed our estimates for ONGC, OIL and Cairn based on the revised cess of Rs4,500/mt. Incorporating this change, our earnings for all the three companies have been revised significantly downwards for FY13E and FY14E. We thus downgrade ONGC, OIL and Cairn from ‘Buy’ to ‘Hold’.
Summary valuations
Company Name
|
CMP (Rs)
|
TP (Rs)
|
P/BV(x)
|
EV/EBITDA(x)
|
P/E(x)
|
EPS(Rs)
|
ROE(%)
|
ROCE(%)
| ||||||
FY12E
|
FY13E
|
FY12E
|
FY13E
|
FY12E
|
FY13E
|
FY12E
|
FY13E
|
FY12E
|
FY13E
|
FY12E
|
FY13E
| |||
CAIRN
|
346
|
347
|
1.4
|
1.2
|
6.0
|
5.0
|
8.6
|
8.1
|
40.4
|
42.8
|
17.4
|
15.7
|
16.9
|
15.4
|
OIL
|
1,212
|
1,310
|
1.7
|
1.5
|
3.5
|
2.8
|
10.1
|
9.2
|
120.1
|
131.5
|
19.0
|
18.7
|
17.1
|
17.3
|
ONGC
|
273
|
282
|
1.8
|
1.6
|
3.8
|
4.1
|
8.2
|
9.7
|
33.4
|
28.2
|
23.2
|
17.5
|
17.5
|
13.3
|
Source: Company, Centrum Research Estimate
Thanks & Regards
No comments:
Post a Comment