Kotak upgrades Cairn India, shares gain

Says current price of Rs 340 provides good entry point as valuations and expectations have turned reasonable

Shares in Cairn India Ltd gained 2.2% after Kotak Institutional Equities upgraded the stock to "buy" from "add" and kept its target price of Rs 340, saying the current price provides a good entry point as valuations and expectations have turned reasonable.

"We find the risk-reward balance favourable now as the stock does not factor in potential upsides from Barmer Hill formation, 19 other discoveries and prospective exploration in Rajasthan block," Kotak said in a report.

The investment bank added that the stock has been penalized enough for missing its "aggressive" guidance.

Cairn India shares have fallen 14.6%in 2013, as of Thursday's close.