Antique Stock Broking puts 'sell' on Cairn India
Antique Stock Broking has initiated coverage on Cairn India with a ‘sell’ rating and a 12-month price target of Rs 144, citing weak oil prices and declining output in company’s key oil fields. “CIL’s value is highly levered to crude oil prices.
By ET Bureau |
Cairn India
cmp: Rs 155.50
target price: Rs 144
Antique Stock Broking has initiated coverage on Cairn India with a ���sell��� rating and a 12-month price target of Rs 144, citing weak oil prices and declining output in company���s key oil fields. ���CIL���s value is highly levered to crude oil prices.
We have assumed a long-term oil price of $60/bbl for our earnings forecast for CY2011, and increased it by $1.5/bbl every year thereafter,��� an Antique note to clients said. ���CIL���s currently producing fields ��� Ravva and Cambay ��� are in decline mode.
Consortium partners have proposed drilling of additional wells, besides planning a capital expenditure ($100 mn net to Cairn) for improving the production profile. However, despite these measures, we believe that production from these fields would decline from CY2010,��� the note added.
cmp: Rs 155.50
target price: Rs 144
Antique Stock Broking has initiated coverage on Cairn India with a ���sell��� rating and a 12-month price target of Rs 144, citing weak oil prices and declining output in company���s key oil fields. ���CIL���s value is highly levered to crude oil prices.
We have assumed a long-term oil price of $60/bbl for our earnings forecast for CY2011, and increased it by $1.5/bbl every year thereafter,��� an Antique note to clients said. ���CIL���s currently producing fields ��� Ravva and Cambay ��� are in decline mode.
Consortium partners have proposed drilling of additional wells, besides planning a capital expenditure ($100 mn net to Cairn) for improving the production profile. However, despite these measures, we believe that production from these fields would decline from CY2010,��� the note added.
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