Buy Cairn India : Target Rs 262
Citigroup Reseach is bullish on Cairn India and has recommended buy rating on the stock in its December 20, 2007 report. “We are adjusting our estimates for Cairn India following the increase in our global oil forecasts to USD 80 per bbl (from USD 70 per bbl) for 2008E, USD 75 per bbl (USD 65 per bbl) for 2009E and USD 75 per bbl (USD60 per bbl) for 2010E onward (see 2008 Outlook: Another Strong Year Ahead, Doug Leggate, 20 Dec 2007). At a long-term crude price of USD 75 per bbl, the shares trade at 0.87x NAV. We expect the stock to continue to re-rate gradually if crude stays at USD 85-90 per bbl over the next 6-12 months. Increasing exploration activity in Cairn’s other domestic exploration blocks in 2008 could provide further upside, “according to Citigroup reseach report.
