The share price of Oil India gained over 6.5 percent on February 13 after reporting its highest-ever quarterly net profit in the third quarter ended December 2022 on the back of a rise in oil and natural gas prices.
The company posted a net profit of Rs 1,746.10 crore compared to Rs 1,244.90 crore in the corresponding period a year ago, it said in a statement.
At 12 pm, the stock was quoting at Rs 239.20 apiece on the NSE up by 6.98 percent and hit an eight-month high. Trading volumes at 6.4 million shares were 5x 20-day average volumes of 1.07 million shares.
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OIL earned $88.33 for every barrel of crude oil it produced and sold in the third quarter of the current financial year, up from $78.59 a barrel realisation in the year-ago period. The higher realisations were despite the windfall taxes levied by the government.
The trend of higher realisations will continue, believes domestic brokerage Motilal Oswal Financial Services. “Although Brent price has cooled off from its peak of ~$120/bbl, we expect crude to remain elevated at ~$90/bbl during FY23-FY25, amid ongoing geopolitical concerns and active production management by OPEC+,” it said in a note.
The brokerage firm has a buy rating on the stock with a target price of Rs 272 indicating a 22 percent upside from the February 10 closing price.
“Numaligarh Refinery Limited expansion would be completed by FY24-25E, with a capex of Rs 28,000 crore. The viability gap funding would only be Rs 1000 crore. The capex would be funded via 70:30 debt: equity; and this equity proportion would be entirely funded by internal accruals of NRL only,” it added.
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