>CAIRN INDIA LIMITED: 4QFY2012 results

■ CIL reports modest 4QFY2012 results: CIL’s top line declined marginally by 0.1% yoy to `3,651cr (above our expectation of `3,437cr). Gross crude oil realization increased by 16.0% yoy to US$109.3/bbl. Operating margin contracted by 207bp yoy to 81.6%, resulting in a 2.6% yoy decline in operating profit to `2,981cr for the quarter. CIL recorded an exceptional loss of `217cr due to forex fluctuation during 4QFY2012. Excluding this exceptional gain, adjusted net profit declined by 4.4% yoy to `2,403cr (above our estimate of `2,263cr).


■ CIL reports rise in potential resources: During 4QFY2012, CIL reported that its estimated potential resources increased to 7.3bboe compared to earlier estimate of 6.5bboe. The recoverable reserves estimate also increased from 1.4bboe to 1.7bboe during the quarter.


■ Outlook and valuation: CIL has the infrastructure in place to ramp up production to meet its targets. Hence, we expect production to gradually increase in the coming quarters to reach a capacity of 175kbopd by FY2013 and 205kbopd by FY2014. Further, there are various untapped exploratory upsides in Barmer Hills and other fields waiting to be developed. Hence, we recommend Accumulate on the stock with a target price of `372.


To read report in detail: CAIRN INDIA
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