Neutral Oil India; target of Rs 400: Motilal Oswal

Motilal Oswal's research report on Oil India

Oil India’s (OINL) 2QFY26 revenue came in line with our estimate at INR54.6b. However, oil/gas sales were 4%/2% below our estimate at 0.83mmt/0.66bcm. Oil realization was USD68.2/bbl (our est. USD67.8/bbl). Adj. EBITDA was 16% below estimate at INR18.4b (-16% YoY). One-off expenses stood at INR5.2b. Exploration cost writeoff/provisions/impairments stood at INR9.8b (INR4.6b in 1QFY26). Reported PAT was 38% below our estimate at INR10.4b.

Outlook

We cut our PAT estimates by 8%/9%/10% for FY26/27/28, as we increase exploration cost write-off expenses. We maintain our Neutral rating on the stock and arrive at our SoTP-based TP of INR400 as we model a CAGR of 2.7%/4.2% in oil/gas production volume over FY25-28.