Shares of Oil India corrected 3.4 percent intraday on February 11 after global brokerages slashed the target price on the stock as Q3FY20 earnings missed expectations.
The stock lost more than 20 percent in the last three months amid falling oil prices. It was quoting at Rs 131.05, down Rs 2.90, or 2.16 percent on the BSE at 12:40 hrs.
While maintaining buy call on the stock, CLSA cut its price target to Rs 195 (from Rs 225 earlier) after profit missed estimates by 32 percent and EBITDA/EBIT missed by 4-11 percent due to lower gas sales and higher seismic expenses.
The brokerage also cut its FY20-22 EPS estimates by 10-27 percent, but still sees an upside.
"With 46 percent upside even on a reduced target, we retain a buy rating as it is one of the cheapest exploration and production companies," it said.
Jefferies also has a buy call on the stock, but slashed target to Rs 275 (from Rs 285) as earnings may fall in FY21-22 on lower realisations.
"We cut FY21-22 EBITDA by 1-4 percent but kept consolidated FY21-22 EPS unchanged at Rs 24 per share," the global brokerage said.
State-owned Oil India reported a 35.2 percent sequential fall in profit at Rs 406.4 crore due to higher tax cost and lower other income.
Revenue from operations fell 5.5 percent quarter-on-quarter to Rs 2,952 crore in Q3F20, while EBITDA was down 4.9 percent to Rs 1,096 crore and margin contracted 150bps QoQ to 37.1 percent in the quarter ended December 2019.
Numbers missed the CNBC-TV18 poll estimates which were at Rs 627 crore for profit, Rs 3,298 crore for revenue and Rs 1,422 crore for EBITDA.
Crude realization in Q3 stood at $63 a barrel (down 7 percent YoY, but up 1 percent QOQ), while natural gas realization declined 12 percent QoQ and 5 percent YoY.
Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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