Oil India Ltd. share price target

Higher volume sparks light; Profits from Gas business disappoints Oil India's revenue increased 4.5% YoY to Rs24.5 bn owing to higher oil volume and realization offset by lower gas volume and price. Oil production volume grew 3.1% YoY to .831mmt (+2.5%...

OILs share price has moved up by 29% over the past 6-months led by stable crude prices and increase in IOCs share price (contributes Rs 97/sh in OILs fair value). However, OIL is still trading at significant discount to ONGC. Our SOTP target is Rs 470/sh (7.5x 12 months rolling forward standalone core EPS Rs 212/sh from investments). Maintain BUY.

Oil India's (OIL) Q2FY17 results were largely in line with our estimates where higher volume was offset by higher other expenses. OIL's revenue/EBITDA/PATdeclined7.9%/9%/17.7% YoY to Rs23/8.4/5.8 bn due to lower oil volume and realization offset by better gas volume. Oil production volume saw a decline of margin 1% YoY to .81mmt (+1.4% QoQ) while gas volume increased 5.8% YoY to 743mmscm (+1.6% QoQ). Also, its net oil realization dipped to US$44.6/bbl in Q2FY17 from US$46.4/bbl in Q2FY16 (better than IDBIest). We are raising TP...

Oil India Ltd (OIL) reported 29% YoY decline in EBITDA to Rs 8.6bn mainly led by lower net oil realisation (-21% in INR terms). Impact of lower other income and higher depreciation was negated by lower tax rate. APAT was Rs 4.9bn (-34%). Crude prices were highly volatile in FY16 and ranged from US$ 62/bbl in 1QFY16 to US$ 33/bbl in 4QFY16. Crude volumes will remain flat in the near term, however, OIL may get YoY higher crude realisations in 2HFY17. OIL’s profits remain largely unaffected if crude is in the range of ~US$ 47/bbl to ~US$ 57/bbl. However, at lower crude prices, negatives from lower net realisation outnumber the benefits from reduction in oil under-recovery. We expect no subsidy sharing by upstream players for crude below US$ 47/bbl. Natural gas price has been reduced 20% to US$ 3.4/mmbtu for 1HFY17.

OIL has moved up by 29% over the past 6-months led by strengthening of crude prices and increase in IOC’s share price. Investment in IOC contributes Rs 91/sh in OIL’s fair value (by assigning 20% discount to IOC’s CMP). Factoring higher value from investments in IOC, They revise SOTP target from Rs 430 to Rs 455/sh (7.5x FY18E standalone core EPS + Rs 206/sh from investments). Maintain BUY.

FY16 has been a mixed bag for OIL. The 45% drop in oil prices was negated by the reduction in OILs share towards oil under-recovery by 97% to Rs 11bn. As a result, EBITDA was flat at Rs 36.1bn ( 2% YoY).

ICICI Securities Ltd | Retail Equity Research Oil India's Q4FY16 results were above our estimates on the profitability front mainly due to lower employee costs. Revenues...

Along with falling crude and domestic gas prices, Oil India (OIL), too, corrected by ~31% in the past year. Gloomy global macros suggest muted crude prices in the near future. However, we believe that most concerns are priced in and OIL offers a favourable risk-reward opportunity at CMP.

ICICI Securities Ltd | Retail Equity Research Oil India's Q3FY16 results were below our estimates on the profit front. Revenues increased 6.7% YoY to | 2341.6 crore, marginally...

IOC is a refining & marketing company and has eight refineries with a total capacity of 1.1mbpd. It has a new 300kbpd refinery coming up at Paradip. It has a 51.9% stake in Chennai Petroleum (two refineries with 230kbpd capacity). Government owns 68.6% of IOC. IOC has a large share of deregulated business with biggest pipeline, Petrochemical and lubes capacity than peers. IOCL will be the largest refiner in India post the commissioning of Paradip refinery, with control over 35% of the refining capacity with its 11 refineries. IOCL has a pipeline (crude + product) network of 11,000+km, with overall capacity of 80.5mmtpa. In the petroleum market,...