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Hold Oil India: target of Rs 130: Sharekhan

Sharekhan recommended hold rating on Oil India with a target price of Rs 130 in its research report dated February 15, 2021.

February 16, 2021 / 05:06 PM IST
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Sharekhan's research report on Oil India

Q3FY2021 adjusted operating profit of Rs. 406 crore (down 44.9% q-o-q) substantially lagged estimates due to higher operating cost and a rise in provisions. Adjusted PAT at Rs. 397 crore (up 6.3% q-o-q) aided by higher other income and tax gains. Operational performance was better than expected with oil/gas sales volume at 0.72mmt/0.59bcm, flat/up 6% q-o-q and 3.4%/6.4% ahead of our estimates. Oil realisation stood at $44.1/bbl (up 3.2% q-o-q),slightly below or estimate of $45.3/bbl. Gas business would continue making losses until there are APM gas pricing reforms and recent rally in crude oil prices may not hold if OPEC+ member countries roll back production cuts. Volatile oil/gas prices and weak production profile makes earnings recovery fragile.


Hence, we maintain a Hold rating on Oil India with a revised PT of Rs.130 given limited upside potential and weak earnings profile. At CMP, the stock trades at 6.5x FY2022E EPS and 5.4x FY2023E EPS.

For all recommendations report, click here


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first published: Feb 16, 2021 05:06 pm
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