Buy Cairn India between Rs 244 and Rs 252. Stoploss at Rs 234 ::HDFC Sec, report

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Cairn India - Existing investors exit between CMP and Rs 255 - Rs 270 band :: HDFC Securities

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Decline in average realization and higher tax out flow impacted top-line and bottom-line of the company Net Sales for Q3FY15, post profit sharing with the Government of India and the royalty expense in the Rajasthan block, was Rs 3,504 Cr ($565Mn) - down 12% Q-o-Q on account of lower realizations at $68.1/ boe, down 25%, due to the softer crude prices. This was partially offset by 13% higher volumes and 2% rupee depreciation on sequential basis. During the quarter, Reported profit after tax was Rs 1349.64 Cr ($218Mn).

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Cairn India - Higher Cost Surprise; Result Update Q3FY15 :: Edelweiss

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Lower crude prices factored in… • Cairn India :: ICICI Securities

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Cairn India -No respite :: HDFC Securities

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Cairn India: Earnings downgrade to reflect lower crude prices :: Kotak Securities

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Earnings downgrade to reflect lower crude prices. We cut our FY2015-17 EPS
estimates for Cairn India by 16-26% to factor in lower crude price assumptions. Our
expectations of lower crude prices in the near term and lack of comfort on production
growth constrain us from taking a positive view on the stock despite recent sharp
correction. We retain REDUCE rating with a revised DCF-based TP of `255 (`275 earlier),
which factors in moderate recovery in crude prices to US$90/bbl in the long term.

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ACCUMULATE Cairn :: Kotak Securities

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

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Cairn India - Compelling Valuations Outweigh Disappointments; Result Update Q2FY15 :: Edelweiss, PDF link

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Technicals- Cairn, GTL Infrastructure, Sterlite Industries, Reliance Infrastructure, Arvind, Crisil :: Business Line

 

Cairn India – Q1FY14 Result Update :: LKP

Cairn India – Q1FY14 Result Update

Cairn’s Q1FY14 adjusted net profit of Rs24.5bn was lower than our estimate of Rs28.2bn on account of lower other income and higher exploration costs. Revenue for the quarter declined by 8.5% on annual basis to Rs40.6bn (qoq +6.9%) as profit petroleum pay out increased from 20% to 30% resulting additional outflow of Rs3.26bn. Average gross production for the quarter was at 212kboepd (yoy +2.6%, qoq +5.2%) while average oil price realization stood at $94.6/bbl (yoy -6.3%, qoq +6%). Production from Rajasthan fields increased by 3.8% yoy to 173.5kbpd (qoq +2.9%). Cairn is currently producing 180kbpd from its Rajasthan fields. The management guided 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 Rs366. At the CMP, the stock is trading at 6.2x and 3.9x FY15e EPS and EBITDA respectively.

Cairn India:: Favourable tide, but stationary ship : Nomura

Stock ignoring favourable oil
price, weak INR, and resource
upsides on elevated concerns


Potential upside +21.4%
Action: We like CAIR for RJ resource upside, but stock is weighed
down by concerns on RJ ramp-up, cash usage, and Cairn Plc stake
sale; recent promoter stake pledge adds to concerns
Despite favourable oil price and INR, CAIR’s performance has been
lackadaisical. Over the last year, oil in INR terms is up 10%, but CAIR is
down 5% (Sensex is up 19%). We continue to believe in resource upside
at Rajasthan (RJ) block. However, for the stock to move out of the current
trading band, we think investors need further confidence in the RJ rampup, and capex and cash usage plans. Moreover, the stake sale by Cairn
Plc remains an overhang. Recently, the promoter group pledged 65.8% of
its 58.8% holding in CAIR (38.7% of total equity), and this adds to
overhang, in our view.

FY14E Rajasthan exit guidance maintained at 200-215,000bpd Cairn:: Centrum

FY14E Rajasthan exit guidance maintained at 200-215,000bpd
Cairn’s Rajasthan crude production in Q4 remained largely flat sequentially at 168,594bpd while revenues jumped due to higher realisations. Operating performance was weaker than our expectations due to higher exploration write offs (primarily due to a dry well in Sri Lanka). However, marginal forex losses and lower tax rate benefitted the bottom line.

Rajasthan crude attracts lower discount in FY13: Although the management indicated crude discount of 10-15% for FY13, Rajasthan crude fetched only 10.7% discount with net realisation of US$98.3/bbl. Sequential improvement in avg. crude realisations at US$100.6/bbl against US$96.2/bbl in Q3 led to 2.0% QoQ jump in revenues at Rs43.6bn.

Rajasthan crude production remains flattish: Cairn’s Rajasthan crude production for Q4 averaged at 168,594bpd a tad lower than 169,977bpd in Q3 (FY13 average at 169,390bpd). Bhagyam production remained stagnant at about 22-23,000bpd and is likely to rise by H2FY14E. Cairn is yet to drill 15 wells as per the FDP and has received approval for drilling additional 15-18 wells to attain plateau production rate.

Cairn India- TP: INR370 Buy ::Motilal oswal,

Cairn India (CAIR) posted EBITDA of INR33b (+9% YoY, -1% QoQ) for 4QFY13, below
our estimate of INR35.6b primarily due to lower realization and higher opex at the
Cambay block. Rajasthan realization was USD99.7/bbl (our estimate: USD101.2/bbl)
and opex was USD4.9/bbl (our estimate: USD3.1/bbl; 9MFY13 average: USD2.9/bbl).
PAT impacted by exploration write-offs of INR3.7b: CAIR’s reported exploration
write-offs of INR3.7b included (a) INR2.7b of dry well write-off at Sri Lanka, and
(b) INR0.7b of 3D seismic survey expense in South Africa. This was partially offset
by (a) lower forex loss at INR28m (our estimate: INR1.5b), and (b) lower than
expected tax rate of 2.2% leading to a PAT of INR25.6b (our estimate: INR30.2b).
Rajasthan discount to Brent at ~12%; production averaged ~169kbpd: Rajasthan
realization was USD99.7/bbl (v/s USD108.5/bbl in 4QFY12 and USD95.6/bbl in
3QFY13), implying ~12% discount to Brent (v/s 13% in 3QFY13). Gross production
averaged 168.5kbpd (v/s 138kbpd in 4QFY12 and 170kbpd in 3QFY13).
Reiterates FY14 Rajasthan exit rate of 200-215kbpd; Mangala field might sustain:
The management indicated that if it gets approval to drill 48 infill wells at Mangala,
it could sustain/extend the current 150kbpd plateau, implying no decline at
Mangala in 4QFY14, contrary to our/consensus expectations. Update on key fields:
(a) Mangala: To drill 48 infill wells to sustain/extend plateau of 150kbpd (status:
approved by Operating Committee (OC), pending with Management Committee
(MC)), (b) Bhagyam: Expects to reach 40kbpd in 2HFY14 (~25kbpd now), ~30 wells
pending to be drilled as per the FDP, (c) Aishwariya: Has drilled nine of 11
development wells and plans to reach approved plateau of 10kbpd in next few
months, and (d) Barmer Hills: Has submitted development plan to OC and expects
to start production by end-FY14 subject to receiving MC approval.
Valuation and view: The stock trades at 5.3x FY14E EPS of INR55.8. Our SOTP value
for CAIR stands at INR370/share, implying 26% upside from current levels. Buy.

Cairn Q4FY13 Result Update_LKP

Cairn - Q4FY13 Result Update

Higher unsuccessful well and exploration costs dents Q4 performance

Cairn’s Q4FY13 net profit of Rs25.6bn was significantly lower than our estimate of Rs30.4bn on account of higher unsuccessful well and exploration costs. Revenue for the quarter increased by 19.5% on annual basis to Rs43.6bn (qoq +2%) on account of production rampup at its key Rajasthan block. Average gross production for the quarter was at 202kboepd (yoy +12%, qoq -1.5%) while average oil price realization stood at $100.6/bbl (yoy -8%, qoq +4.6%). Cairn is currently producing 150kbpd and 20-25kbpd from Mangala and Bhagyam fields in Rajasthan. Production from Aishwariya began during the quarter and is expected to rampup to FDP approved rate of 10kbpd over the next few months.

We upgrade our rating on Cairn from NEUTRAL to BUY with a revised SOTP based target price of Rs357. At the CMP, the stock is trading at 6.5x and 4.2x FY15e EPS and EBITDA respectively.

Actual v/s Estimates

Y/E, Mar (Rs. m)	Q4FY13	Q3FY13	qoq (%)	Q4FY12	yoy (%)	LKP Estimates	Deviation (%/bps)
Revenue	43,634	42,776	2.0%	36,513	19.5%	45,707	-4.5%
EBITDA	28,924	32,585	-11.2%	29,163	-0.8%	35,540	-18.6%
EBITDA (%)	66.3%	76.2%	-989 bps	79.9%	-1358 bps	77.8%	-1147 bps
APAT	25,664	29,204	-12.1%	24,032	6.8%	30,368	-15.5%
RPAT	25,636	33,449	-23.4%	21,862	17.3%	30,368	-15.6%

Technicals: Berger Paints, M and M Financial, Aditya Birla Nuvo, Cairn, Adani Enterprises, Asahi:: Business Line

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Technicals- LIC Housing, Cairn, Andhra bank, Colgate, reliance infrastructure, SML ISUZU, Raj TV ::Business Line

Cairn - Management Interaction Update - Centrum

Management Interaction Update

Cairn

Buy

Target Price: Rs400

CMP: Rs320

Upside: 25%

We recently interacted with the management of Cairn to get their feedback on ongoing projects. The key highlights are:

Cairn India:: ShareKhan Diwali Muharat Picks 2012

Cairn India owns ten oil and gas blocks that include producing, development and exploration assets.
The Rajasthan block, RJ- ON-90/1, in which it has a 70% stake, contributes significant proportion of
Cairn India's total production. The location of the ten blocks is divided into three strategically focused
areas: one in Rajasthan; three on the west coast of India; and five on the east coast of India, including
one in Sri Lanka. Recently, Cairn India acquired one block at South Africa. Exploration activities are at
different stages in some of these blocks.
Cairn India has net cash of US $2.4 billion or Rs65/share, about 20% of its current market cap and
nearly equal to its capital expenditure guidance for the next two years. This leaves room for the
possibility of a higher payout to the shareholders.
Portfolio optimisation in process: Cairn India has identified a high-risk, high-value deeper prospect at
Ravva, capable of extending the field’s economic life; the drilling for the same is scheduled in H1FY14.
Acquisition of 3D seismic data of Sri Lanka is complete with exploratory drilling planned in mid-CY2013.
The Aishwarya field commencing by FY2013-end, and government of India approval to further explore
Rajasthan basin, where besides crude, rich gas finds in southern part can be commercially exploited.

Cairn - Q2FY13 Result Update - Centrum

Q2FY13 Result Update

Cairn

Buy

Target Price: Rs384

CMP: Rs338

Upside: 13.7%

Good news as maiden dividend is expected

Cairn’s operating performance was in line with adjusted PAT rising by 5.0% QoQ at Rs31.1bn yet forex losses led to 39.3% decline in reported PAT which came at Rs23.2bn. Rajasthan crude production grew by 2.8% QoQ at 171,801bpd while it fetched realisation of US$97.6/bbl (10.8% discount to Brent). Cairn’s corporate restructuring has been approved by the government post which the company board meeting is scheduled on 30 October for discussing maiden dividend. We believe this is the near term trigger for the stock.