Barclays maintains ‘overweight’ on Cairn India, cuts target price

NEW DELHI: Barclays maintains ‘overweight’ rating on Cairn India but has slashed its target price from Rs 430 to Rs 390, the global investment bank said in a report.

At 10:25 a.m.; Cair India was trading 1.5 per cent higher at Rs 292.40. It hit a low of Rs 290 and a high of Rs 293.75 in trade today.

Barclays cut FY14-16 EPS estimates by 7-8 per cent to incorporate lower Brent estimates.

The investment bank continues to find the valuation attractive and see gradual volume growth in Rajasthan, exploration successes and easing debt repayment concerns at parent Vedanta as the key catalysts for the coming year.

Cairn India is likely to start drilling programme in the KG basin from next week. The company will spend US$45m to evaluate the size of its oil discovery in the Nagyalanka SE 1 oil field in the Krishna Godavari (KG) basin.

The company had discovered this offshore field in partnership with ONGC (51%) in April’12.

KimEng Securities like Cairn India for it’s cheap PER of 5x FY14F and maintain BUY.