Motilal Oswal is bullish on Oil India has recommended buy rating on the stock with a target price of Rs 239 in its research report dated February 12, 2019.
Motilal Oswal's research report on Oil India
Revenue increased 23% YoY (-6% QoQ) to INR35.1b, marginally ahead of our estimate of INR34.5b. Crude oil sales/production ratio stood at 97%, while realization was at USD66.7/bbl (in line with our estimate of USD66.8/bbl; +12% YoY, -9% QoQ). EBITDA grew 24% YoY (+3% QoQ) to INR15.2b (16% ahead of our estimate of INR13.1b), as other expenditure came in lower at USD6.4/boe (our estimate: USD8.0; 3QFY18: USD6.0; 2QFY19: USD9.4) due to (a) reduced provisions of ~INR186m (2QFY19: INR1.2b) and (b) lower insurance, rent and sundry expenditure of INR1.5b (2QFY19: INR2.7b). PAT of INR12.3b (+75% YoY, +43% QoQ) came in above our estimate of INR8.5b due to higher other income of INR6.0b (our estimate: INR4b; ~3x YoY, ~2x QoQ).
Our SOTP-based fair value stands at INR239 (incl. investment value of IN67). We value OINL at 8x Dec’20E adj. EPS of INR27.5, and add investments of INR67 in IOCL, NRL and BCPL. The stock trades at 5.5x FY20E EPS of INR30.7. Dividend yield is attractive at ~8.4%. Maintain Buy.
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