Inactive members - Registered but have not posted any topic will be removed after 6 Months.
0 Members and 1 Guest are viewing this topic.
Growth on the cards, initiate with a ‘Buy’: Selan’s return ratios are consistently high in excess of 20%. We believe strong production growth both in crude and natural gas will culminate in healthy earnings growth for the company. We have valued Selan at its 5-year average P/E of 11x (multiple depressed due to production decline and is expected to expand while crude production ramps up) due to strong volume growth and healthy return ratios. The stock is available at 9.5x and 7.5x FY14E and FY15E EPS of Rs31.4 and Rs40.0 respectively. We recommend ‘Buy’ with a target price of Rs393 (Based on 11x SeptFY14E EPS).
