Oil India Ltd. share price target

due to weak spot LNG price to make up for weak GRMs. We lower our FY21/22 earnings estimates as we update FY20 actuals. During FY20, core standalone EBIDTA adjusted for inventory and forex loss was healthy at Rs280bn (-10%YoY) despite lower refining margins ($0.08/bbl vs $5.4/bbl in FY19). Sharp drop in crude oil prices dragged down reported FY20 PAT, however, with recovering crude oil prices part of the losses to be...

During the quarter, the company witnessed decline in revenue of 16.0% YoY to Rs. 2,952cr. The revenue was suppressed by both the major segments of the company, Crude Oil and Natural gas, declining 16.2% YoY to Rs. 2,326cr and 12.1% YoY to Rs. 505cr, respectively. Crude oil revenue continued to be impacted by softened prices leading to a drop in price realization to Rs. 4,507/bbl from Rs. 4,805/bbl in Q3FY19. Environmental issues and lower demand led to the decline in Crude oil production by 10.9% YoY to 0.747mmt along with drop in Natural gas production by 4.8% YoY to 0.697bcm. Similarly, Crude oil sales weakened by 10.8% YoY to 0.726mmt and Natural...

We lower our estimates by 2-7% to factor in lower volume growth and realization. OINL stock has underperformed broader index due to weak volume trajectory and concerns of stake divestment by government. Capital allocation risk is also there given investments in Mozambique where returns will be back ended. We maintain Accumulate' with a price target of Rs186...

Oil India's (OINL) Q3FY20 earnings disappointed at Rs 4bn (67% YoY).

We reiterate our BUY rating on the stock given the sequential recovery in crude prices and expected GRM improvements over the next few quarters, with a revised target price of Rs. 135 based on SOTP. Revenue under pressure as crude prices remain soft In Q3FY20, revenue fell 9.6% YoY to Rs. 144,820cr (+9.4% QoQ) due to low throughput on account of shutdown of refineries for BS-VI upgradation. As a result domestic utilization of pipelines remained at only 88.7% (vs. 92.2% in Q2FY20). Amongst segments, Petrochemical witnessed steep declines of 24.0% YoY to 4,152cr, followed...

Benign crude prices is positive and will support marketing profits. We lower our FY20-22 earnings estimates to factor in lower refining margins. During Q3, core performance for IOCL was weak due to weak refining performance. While benign crude oil prices is likely to support marketing margins in medium term, refining scenario has worsened with muted demand...

Q2FY20 standalone revenue dropped 14.2% YoY as crude oil revenue continued to decline 20.5% YoY, offset to some extent due to the increase in natural gas revenue (+27.2% YoY). Crude oil sales volumes declined 4.9% YoY coupled with weak crude oil price realization (-16.5% YoY). However, natural gas production and sales volume increased by 1.8% YoY and 4.3% YoY respectively. EBITDA margin tapered by ~70bps YoY to 38.7%, while EBITDA...

We expect oil prices to remain muted owing to robust supply from US Shale, despite production cut from OPEC and non-OPEC countries. Thus, concerns over subsidy sharing are overrated. Upstream companies were undesirable despite realising market price for crude oil, mainly on account of the subsidy sharing with OMCs. OIL will generate OCF yield of almost 30% and divided yield of 7.5% over FY20/21E. The current valuations are contextually low at 2.8/2.1x FY21/22E EV/EBITDA and 5.2/5.0x FY21/22 PER. Our TP is Rs 230/sh (6x Sep-21E standalone + Rs 85 from investments). Maintain BUY. We maintain BUY on OIL post an inline performance in 2QFY20. Though concerns over lack of production growth still persist, we think that the current valuations (2.8/2.1x FY21/22 EV/EBITDA and 5.2/5.0x FY21/22 PER) indicate strong pessimism.

Oil India's (OINL) Q2 FY20 earnings at Rs 6.2bn (-27% YoY) was below estimates.

10 November 2019 2QFY20 revenue was 5% higher than est. at INR32.1b (-14% YoY), led by higher gas sale and higher than expected net realization. EBITDA was 12% lower than est. at INR12.4b (-16% YoY) due to higher employee cost (+37% YoY, +21% QoQ). Till 1HFY20, a total provisioning of INR4.4b has been made toward pay revision of Unionized Employees due from Jan17. Total other expenditure was lower at USD5.9/boe v/s USD9.4/boe in 2QFY19. PBT for the quarter was down 23% YoY to INR9.7b, led by higher depreciation cost of INR4.2b.