Selan Exploration Technology Update Report By Sharekhan

Valuation; negatives discounted the risk-reward favourable:

Selan’s exploration share price now discounts most of the negatives with a sharp decline in the crude oil prices as one of the key external changes affecting its earnings and valuations. We retain our bullish stance based on two reasons: First, purely on our confidence of the management’s ability to execute the set target of exponential jump in the production volumes over the next two to three years; and second, our view that the recent plunge in crude oil prices is not sustainable and the crude oil prices would eventually stabilise around $80-85 per barrel sooner than later. Consequently, we retain our Buy recommendation with a price target of Rs. 550.

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