Cairn
CMP: Rs 134.40
Cairn as our top pick in the sector on the back of impending commencement of production from its oil blocks at Rajasthan and significant free cashflow generation going forward. At present, Cairn’s stock price implies long-term crude price of $43/bl vis-à-vis $59/bl for ONGC,” the outfit said in a report.
Explaining the logic behind trimming Cairn fair value estimates, ICICI Securities said: “In line with our revisiting crude price and exchange rate estimates, we are revising our long-term INR-US$ exchange rate estimates to 40 (from 39) and increasing the cost of equity for Cairn to 15.2% from 14%.
