Aban Loyd's diversified asset base provides the company with drilling capabilities in a wide range of water depths and soil conditions.The company's asset ramp-up has been well timed by management in a period of high crude oil prices, which has led to a sustained surge in exploration and production (E&P) expenditure. The tight demand-supply situation for offshore assets is leading to high rig utilisation and a sharp rise in operating rates.Aban Loyd is the largest Indian offshore service company, and its diversified fleet should benefit from the upswing in demand and rates.A well-timed asset addition and its low-cost operation and strong relationship with E&P companies have put Aban Loyd in a strong position.These circumstances, coupled with a tight offshore services market, should ensure robust earnings growth for Aban Loyd.The company is expected to report an earnings CAGR of 110%-plus from FY06-09.UBS Investment research has put - Buy on the stock with the target price of Rs 1,750.
