Kotak upgrades Cairn India; shares gain

Shares in Cairn India gain 2.2 percent after Kotak Institutional Equities upgraded the stock to "buy" from "add" and kept its target price of 340 rupees, 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 says in a report.

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

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