Religare has come out with its second quarter (July-September) earnings estimates for the India Energy sector. The brokerage house expects Oil India to report net profit at Rs 574.5 crore, up 16.2 percent quarter-on-quarter.
Net Sales are expected to increase by 7.5 percent Q-o-Q (down 4.4 percent Y-o-Y) to Rs 2292.4 crore, according to Religare.
Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to rise by 11.4 percent Q-o-Q (up 12.1 percent Y-o-Y) to Rs 863.1 crore.
Religare's report on Oil India
The recent increase in oil prices could negate the impact of a cut in domestic gas prices. At US$ 50/bbl oil prices, OINL’s earnings could improve to Rs 6.8bn from Q3FY17 onwards.
We don’t see any earnings upgrade for the stock at current oil prices. Oil prices need to average above US$ 60/bbl for any significant upside in earnings and valuations.
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