O&M: IIFL has sector report. Cite of long drawn Petrobras story, and reiterate Hold for KepCorp (TP $10.50) and sell for SembMarine (TP $5.00). Expect SMM to win some orders but Kepcorp is in a better position for this tender. Reiterate that building UDW newbuilds in Brazil to meet local content requirements is challenging for yards due to the lack of existing infrastructure and skilled labour…..
Even though the potential impact on rev would be substantial (from order wins), earnings (margins) may have a limited impact due to cost escalations.
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