Reduce Oil India; target of Rs 88: HDFC Securities
HDFC Securities recommended reduce rating on Oil India with a target price of Rs 88 in its research report dated November 11, 2020.
November 15, 2020 / 01:10 PM IST
HDFC Securities' research report on Oil India
Despite production cuts from OPEC and non-OPEC countries, we expect oil prices to remain at USD 34/37 per barrel in FY21/22E vs. USD 61/bbl in FY20, given the weak global macro. With no subsidy sharing with OMCs, OIL remains a pure-play on the crude oil price. 2QFY21 EBITDA/APAT was 38/125% above our estimates, owing to significantly lower-than-expected operating costs and a lower tax provision.
Our REDUCE recommendation on Oil India with a price target of INR 88 is premised on (1) a muted crude oil and gas realisation and (2) lack of production growth for both oil and gas.
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