Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Money / Company Update: Cairn India
BackBack

Company Update: Cairn India

Company Update: Cairn India

Premium


For Q1’10, Cairn India Limited’s (CIL’s) net revenues declined 49.2% y-o-y to Rs2,049.5 million. This decline was largely due to a 15.2% y-o-y fall in the net production per day and a 46.2% y-o-y decline in average price realizations ($51.2 per boe), partly offset by the depreciation of the rupee.

Overall results have benefited from higher other income, which included income from investments of Rs571 million and forex gains of Rs718 million. In addition, there was a write-back of deferred taxes to the extent of Rs418.6 million.

However, the Company’s reported net profit fell 67.2% y-o-y to Rs454.7 million on account of an exceptional provision of Rs1,637.1 million for a past-profit petroleum payment pertaining to Ravva that was due to the GoI. The matter is currently under appeal in the higher court.

Outlook

We maintain a Hold rating for the stock based on our DCF-based net asset value at Rs250.

Key Assumptions for arriving at the value include (i) company’s potential to grow its production volumes significantly in FY09- FY14. The company currently reports net 695 mmboe of 2P reserves yielding an attractive RP ratio of 75 years based on the estimated production for FY’10 (ii) increase in price realisations to reflect the impact of the recent recovery in crude oil prices; we expect crude prices to hover at $70 -80/bbl in the near term.

However, this is partly offset by a 15% discount on pricing (vs.10% assumed earlier) as per the revised pricing formula.

Click here for a detailed report

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 20 Aug 2009, 11:21 AM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App