Prabhudas Lilladher's research report on Oil India
Oil India (OINL) reported decline of 3% QoQ in oil sales while gas sales rose 5% QoQ. Oil price realization declined from USD74.5/bbl in Q4FY25 to USD66.2/bbl during the quarter. The company wrote-off its investments of Rs3.07bn in Bangladesh. Total other expenditure stood at Rs16.9bn against Rs16bn in Q4FY25 and Rs14.5bn in Q1FY25. Due to the higher other expenditure, EBITDA declined 19% QoQ to Rs16.1bn (Ple Rs24.4bn, BBGe Rs22.8bn) despite only 9% decline in sales QoQ. PAT stood at Rs8.1bn (Ple Rs15.2bn, BBGe Rs14.2bn). We build a conservative rise to 3.8mmt of oil and 3.9bcm in FY27E, respectively from 3.4mmt and 3.3bcm in FY25.
Outlook
Given the significant production increase on the horizon, we re-iterate our ‘BUY’ rating valuing the standalone business at 9x FY27 adj EPS and adding the value of investment in NRL to arrive at our TP of Rs581.
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