Oil India Ltd. share price target

Oil India (OINL) reported Q2FY21 earnings of Rs 2.4bn, well above our estimates.

We reiterate our BUY rating on the stock given the expected pickup in fuel demand in the upcoming quarters. Also, current capex plans for petrochemical segment should help improve margins. We revise our target price to Rs. 92 based on SOTP. Strong bottom-line performance despite lower revenue IOCL's Q2FY21 revenue came in at Rs. 115,749cr, a fall of 12.6% YoY, due to reduction in demand for petroleum products post pandemic lockdown. Petroleum Products sales reduced 13.1% YoY to Rs. 110,715cr, due to slow growth of gasoline and gas oil in most...

Oil India (OIL) reported a mixed-bag in Q1FY21 where EBITDA was ahead of our forecast led by lower then estimated other expenses while net profit was below expectations driven by higher then estimated DDA expense. Revenue was down 48.3% YoY to Rs17.4 bn owing to 8.1%/8.6% YoY decline in oil/gas sales volume and 54%/29% YoY drop in oil/gas realization in Q1FY21. We expect oil production to fall by 2% in FY21 and flattish growth in FY22 due to natural decline. Gas volume is estimated to dip by 5% for FY21 before reaching to FY20 levels in FY22 on the back of Baghjan fire, flood and Covid-19. We forecast crude oil price (Brent) to average to US40/bbl and US$50/bbl in FY21 and...

Oil India Limited (Oil India) reported weak Q1FY2021 numbers, clocking a net loss of Rs. 249 crore (as against a net profit of Rs. 625 crore in Q1FY2020) due to: 1) weak oil and gas realisations, declining by 54.1% y-o-y and 29% y-o-y respectively, 2) higher-than-expected operating expenses on account of exploration cost write-off of Rs. 115 crore (versus negative Rs. 1 crore in Q1FY2020) and 3) exceptional expenses of Rs. 93 crore related to control blowout at Baghjan Oilfields and 4) lower-than-expected other income (down 87% q-o-q). Even after adjusting for exceptional expenses, net loss...

Oil India (OINL) reported a loss of Rs 2.5bn for Q1FY21, impacted by one-off expenses to contain a blowout at one of its oilfields in Assam.

Given the pickup in fuel demand post COVID-19 lockdown coupled with IOCL's current capex plans, margins to improve over the long term. Also, the stock is currently available at attractive valuations. We hereby reiterate our BUY rating with a revised TP of Rs. 96 based on SOTP. Topline declines with low fuel demand IOCL recorded revenue of Rs. 88,937cr, a fall of 40.8% YoY, due to nationwide lockdown and lower capacity utilization in April. Petroleum Products sales fell 41.6% YoY to Rs. 85,197cr, due to de-growth of gasoline and gas oil. Petrochemicals fell 27.9%...

Lower than expected results: IOCL reported lower than expected Q1 results with standalone EBITDA of Rs55.1bn (PLe 150 bn) and PAT of Rs19.1bn (PLe Rs83.1bn). Lower operating profit was due to 1) inventory losses of Rs31.9bn (PLe +Rs17.7bn) and 2) lower than expected GRMs. Q1 EBIDTA adjusted for inventory and forex loss was at Rs86.3bn. For Q1 IOC followed accounting norms to value crude at cost or net realizable value whichever is lower- crude valued at Q1 end was t USD32.6/bbl vs Q4 end price of USD36/bbl. With crude...

Oil India Limited's Q4FY2020 adjusting PAT stood at Rs. 502 crore (down 38.6% y-o-y), which was above our estimate of Rs. 462 crore. The beat was on the account of higher-than-expected other income at Rs. 673 crore (which excludes one-time interest income of Rs. 321 crore on tax refund) and lowerthan-expected DD&A; expenses (down 40.4% y-o-y) partially by weak gas sales volume (down 14.4% y-o-y; down 11.2% q-o-q) and higher operating cost excluding provision (up 44% y-o-y). Oil sales volume at 0.75mmt (down 3.7% y-o-y; up 3% q-o-q) was in-line with our estimates and net oil realisation at $52.2/bbl (down 15.5% y-o-y; down 17.5% q-o-q) was marginally ahead of...

29 June 2020 OINL recorded impairment of INR12.3b considering the impact on lower crude oil and gas prices and the additional INR5.5b in the KG Basin. This totals to INR17.8b, which has been accounted for in other expenditure. However, we have classified the impairment and write-offs as part of DD&A.; Therefore, our EBIDTA stands at INR6.8b (v/s est. -5% and -38% YoY/QoQ) against EBITDA loss of INR11b reported by the company. Owing to the aforementioned adjustment, DD&A; for the company now stands at INR20.3b (translating to USD26.7/boe). Other income was higher at INR9.9b (INR4.2b in 4QFY20) due to higher dividend and interest income.

Oil India (OIL) Q4FY20 reported first-time ever negative EBITDA on the back of lower volume and realization. However, due to higher other income and deferred tax writeback OIL reported 51.5% YoY growth in net profit. Revenue was down 16% YoY to Rs26 bn owing to 3.4%/8.3% YoY decline in oil/gas production volume and 15.5%/3.2% drop in oil/gas realization in Q4FY20. We expect oil production to fall by 2% in FY21 and stable in FY22 due to natural decline. Also, gas volume to dip by 5% for FY21 before reaching to FY20 levels in FY22 on the back of Baghjan fire, flood and Covid-19. We forecast crude oil price (Brent) to average to US40/bbl and US$50/bbl in FY21 and FY22 vs US$60.9/bbl in FY20. We value it's core business at Rs55 (4.5x EV/EBITDA) and Rs58 for...