>ESSAR OIL LIMITED (ANAGRAM)

MAJOR DEVELOPMENTS

■ Firm arrangements with HPCL, BPCL & IOC for product off-take of 7 million tonnes and infrastructure support from these companies provide a strong foothold in the domestic market.

■ Retail outlet reactivation started from Q#FY09. Retail sales for the quarter January to March 2009 stood at 264,421 KL, a 253% jump over the Q3 sales of 74998 KL.

Outlook and Valuation

Going ahead, the performance of the stock will be greatly leveraged to progress on refinery expansion, refining margins & news flow on E&P business. Based on the assumption of crude oil prices at the levels of USD 50/ barrel for FY10E and USD 55/ barrel in FY11E from the current level, the stock is trading at a forward P/E of 19.36xFY10E and an EPS of Rs.9.2xFY10E.Based on the above mentioned assumptions the target price is Rs.167 (18 P/E + E&P).

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