Sharekhan puts BUY on Shiv-Vani Oil

Sharekhan puts BUY on Shiv-Vani Oil
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First Published: Wed, Aug 13 2008. 09 14 AM IST
Updated: Wed, Aug 13 2008. 09 14 AM IST
With a fleet of 29 onshore drilling rigs and six seismic survey crew, Shiv-Vani Oil and Gas Exploration (SOGEL) has emerged as the largest onshore service provider catering to oil and gas exploration companies.
Augmentation of assets by the company is well timed in the industry up-cycle as heightened exploration activity has led to a severe shortage of resources with service providers, leading to firming up of day rates (or billing rates per km in case of seismic survey) for various services.
Moreover, the order backlog of over Rs5,300 crore (over 9x FY2008 revenues) provides strong revenue-growth visibility.
The consolidated revenues and earnings are expected to grow at CAGR of 47.3% and 49.8% respectively over the three-year period FY2008-10.
Despite the robust growth prospects, the scrip is available at attractive valuations of 17.1x FY2009 and 11.4x FY2010 earning estimates. We recommend BUY on the stock with a target price of Rs725.
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First Published: Wed, Aug 13 2008. 09 14 AM IST
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