Your Stock Queries
4/18/2013 9:00 PM Thursday
I have bought 1000 shares of this company recently. Should I consider it to be a long-term bet for my portfolio?
- Gauravi Pasricha, Via Email
|BSE/NSE Code ||532792/CAIRN |
|Face Value ||Rs 10 |
|CMP ||Rs 290 |
|52-Week high/low ||Rs 366/Rs 268 |
|Current Profit/(Loss) ||NA |
You already seem to have a fair idea of your holdings and their potential. In any case, following is a peek at the company’s prospects and an answer to your query.
Cairn India is primarily an independent oil and gas exploration and production company. It holds interests in approximately 10 blocks located in the Barmer basin, the Krishna-Godavari basin, the Mumbai Offshore basin, the Kerala-Konkan basin, the Palar-Pennar basin, and the Cambay basin in India, as well as in the Mannar basin in Sri Lanka. The company also operates a pipeline and storage terminal. Cairn India sells its oil to refineries and gas to the public and private buyers. The company was incorporated in 2006 and is a subsidiary of Vedanta Resources Plc. In a recent development, Cairn India has made its latest oil discovery, the 26th discovery so far in the RJ-ON-90/1 block, following recent policy clarity by the Government of India to conduct exploration activity in development blocks.
The financial numbers of the company are quite impressive for Q3FY13. The topline witnessed a growth of 38.13 per cent on a YoY basis to stand at Rs 4277.61 crore for Q3FY13 as against Rs 3096.76 crore for Q3FY12. The bottomline witnessed a growth of 47.88 per cent to stand at Rs 3344.89 crore for Q3FY13 as against Rs 2261.93 crore for Q3FY12. On the valuation front, the stock discounts its trailing twelve-month earnings by 4.75x and the EV/EBITDA stands at 5.03x. The debt to equity ratio stands at a miniscule 0.06x.
Answering your query, we can say that it is a good idea to look at this counter as a long-term investment.
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