Buy Oil India; target of Rs 644: Emkay

Emkay's research report on Oil India

"Oil India, results were broadly inline with our and consensus est. at Sales and EBITDA level. However, recent change in depreciation policy improved PAT qoq to Rs8.5bn (our est. Rs7.7bn)

Crude oil sales volume improved by 6.8% qoq to 0.84mmt. While, natural gas sales volume increased by 11% qoq to 0.549bcm. Net realization at $52.4/bbl vs. $37.4/45.9bbl qoq/yoy

Of the gross under-recovery of Rs285bn, the total upstream share for Q1FY15 stood at Rs155bn (54% share). Within upstream, Oil India’s share stood at 12% to Rs18.4bn

Clarity in gas pricing and resolution of the subsidy issue would be a material positive for upstream companies. At CMP, the stock trades at 8.7x FY16EPS and 1.4x P/bv. Maintain Buy, with a TP of Rs 644", says Emkay Global Financial Services research.

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