Motilal Oswal's research report on Oil India
Oil India (OINL) reported in-line EBITDA at INR23b (down 12% YoY) in 1QFY24. Oil sales volumes were 5% below our estimates at 0.75mmt, while gas sales declined 8% YoY to 0.54bcm, due to lower offtake from customers amid maintenance shutdowns. Net oil realization, after accounting for the impact of windfall tax, came in at USD74.3/bbl for the quarter. We expect the crude prices to gradually increase to ~USD90/bbl by 4QFY24 and remain at that level in FY25 amid active production management by OPEC+ leading to supply tightness during the second half of fiscal year.
Outlook
The stock currently trades at a P/E multiple of 6.4x FY24E EPS. We value the stock at 6x FY25E standalone adj. EPS and add investments to arrive at our TP of INR345. We reiterate our BUY rating on the stock.
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