IDFC-SSKI Securities puts 'outperformer' on Essar Oil

CMP: Rs 155.75

Target price: Rs 242

IDFC-SSKI Securities has reinitiated coverage on Essar Oil with an ���outperformer��� rating and price target of Rs 242. ���Our optimism on the stock stems from the potential size and scale of the business, along with an attractive E&P portfolio,��� the institutional brokerage said. ���We see E&P proving to be a significant growth driver for EOL in the long term, and have attributed a value of Rs 58 per share to the reserves.���

���The capacity expansion to 16m tpa in phase I and 34m tpa in phase II over FY10-13E would impart scale to EOL. Post-expansion, EOL will have one of the largest single-location refineries in the world, which would lend sourcing flexibility and improve operational efficiencies,��� IDFC SSKI added.