Morgan Stanley resumes coverage on Cairn India with “overweight” rating and a target price of Rs 416.
The investment bank says Cairn also features in its “top pick” in the Asia exploration and production sector due to “high” production growth, increasing reserve base, “strong” free cash flow and as “key” gainer of weaker rupee.
The brokerage expects Cairn to increase its production from 170Kbpd currently by 50%
to 240Kbpd by end-F2014, the strongest meaningful growth amongst Asian E&Ps.
Morgan Stanley says a special dividend “is a possibility” considering “large” amount of cash in the balance sheet.
Key risks include falling crude prices, geo-political risks and more potential stake sales from Cairn Energy.
Cairn shares last up 1.1 percent at Rs 312.20.