>OIL INDIA LIMITED (KOTAK SECURITIES)

East side story. We expect Oil India Limited to likely create significant value from its current large oil and gas reserves and solid exploration abilities. We initiate coverage with a BUY rating and 12-month target price of Rs 1,350 based on 10X FY2011E EPS. Our positive view stems from OIL's production profile, attractive valuations and strong financials.

• Attracitive valuations- Buy rating with 12-month target price of Rs 1,350
• Upside potential - favorable subsidy-sharing, natural gas price increase and new discoveries
• Strong cash flow generation, net income driven by volume growth, higher crude price
• Key risks-unfavorable subsidy-sharing scheme, lower than expected crude price, regulations

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