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%
|
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