Cairn India Ltd.|Q2FY15 Result Update | Below our expectation, reduce our target price to Rs. 377 ::IndiaNivesh

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Cairn India reported Q2FY15 PAT was significantly down due to lower oil
production volumes, shutdown in Mangala processing terminal. On
operational front, the company achieved total gross operated production of
194.5 kboepd (thousand barrels of oil equivalent per day) vs. 215 kboepd in
Q1FY15. Rajasthan block production stood at 163.26 kboepd (down 11% YoY)
vs. 183.89 kboepd in Q1FY15.
 Revenue decreased by 10% YoY and 14% QoQ to Rs 39.82 bn (in line with our
expectation of Rs 39.2 bn) because of lower volume from Rajasthan and Ravva
field coupled with lower realization due to fall in crude prices.
 EBITDA margin contracted by 140 bps QoQ and 818 bps YoY to 66.7% due to
higher production expenses and higher profit petroleum sharing from RJ field.
The overall operating expense in Rajasthan was higher at US$ 6.3/bbl on
account of increased well and facility maintenance costs during the planned
shutdown.
 The company booked foreign exchange gain of Rs 2.4 bn vs. Rs. Rs 989 mn in
Q1FY15 on US dollar deposits and receivables. Adjusted PAT (excluding forex
gain) comes at Rs.20.37 bn, below our estimates of Rs. 21.94 bn due to lower
operating margin. Management has guided 3 year production CAGR of 7-10%
from known discoveries with flat production in FY15.

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