Oil India Q1 PAT seen down 18% at Rs 764 cr: Motilal Oswal
Motilal Oswal expects Oil India to report a 0.1 percent degrowth quarter-on-quarter (fall of 17.9 percent year-on-year) in net profit at Rs 763.6 crore.
August 12, 2013 / 17:28 IST
Motilal Oswal has come out with its first quarter (April-June) earnings estimates for the oil & gas sector. The brokerage house expects Oil India to report a 0.1 percent degrowth quarter-on-quarter (fall of 17.9 percent year-on-year) in net profit at Rs 763.6 crore.
Revenues are expected to decrease by 10.1 percent Q-o-Q (down 8.4 percent Y-o-Y) to Rs 2,136.9 crore, according to Motilal Oswal.Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to rise by 2.6 percent Q-o-Q (down 17.6 percent Y-o-Y) to Rs 903.4 crore.Motilal Oswal report on Oil IndiaWe expect Oil India to report PAT of INR 7.6 billion (v/s INR 9.3 billion in 1QFY13 and INR 7.7 billion in 4QFY13). OINL's subsidy sharing has been ad-hoc at USD 56/bbl for FY13. Similar to FY13, we model subsidy sharing at USD 56/ bbl until there is further clarity. Government has set up a committee to look into the subsidy sharing mechanism and thus provide clarity over the longer term.We estimate EBITDA at INR 9 billion (down 18 percent Y-o-Y and up 3 percent Q-o-Q). We estimate gross realization at USD 102/bbl v/s USD 110 in 1QFY13 and USD 111 in 4QFY13 and net realization at USD 47/bbl v/s USD 54/bbl in 1QFY13 and USD 55/bbl in 4QFY13.Subsidy sharing assumption: For FY14E/15E, we model upstream sharing at INR 600 billion (similar to FY13), and OINL's share at 13.1 percent of upstream. We model the company to share INR 19.6 billion in 1QFY14E.Brent price estimate is USD 105/bbl for FY14E/15E and at USD 95/bbl for long term; upstream sharing at INR 600 billion (similar to FY13) in FY14E/15E.The stock trades at 7.3x FY15E EPS of INR 78.3. We remain positive on OINL due to the recently announced diesel reforms, gas price hike
and strong operational foothold; other factors are: (1) steady production growth, (2) high share of OINL in its reserves (55 percent in 1P and 62 percent in 2P) and (3) attractive valuations (>40 percent discount to its global peers on EV/BOE, 1P basis). Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
