Oil India Q1 Results Review - Outlook Intact Amid Stable Performance: Motilal Oswal

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Motilal Oswal Report.Oil India Ltd. reported in-line Ebitda at Rs 23 billion (down 12% YoY) in Q1 FY24. Oil sales volumes were 5% below our estimates at 0.75 million metric tonne, while gas sales declined 8% YoY to 0.54 billion cubic metre, due to lower offtake from customers amid maintenance shutdowns. Net oil realisation, after accounting for the impact of windfall tax, came in at $74.3/barrel of oil for the quarter.We expect the crude prices to gradually increase to ~$90/bbl by Q4 FY24 and remain at that level in FY25 amid active production management by OPEC+ leading to supply tightness during the second half of fiscal year.  Although the levy of windfall tax by the Center with a fortnightly revision raised concerns on realisations of upstream companies, the government has adjusted windfall taxes in line with crude oil fluctuations. Our estimate suggests that the government is allowing a post-windfall realization of $68-81/bbl and we expect it to remain at ~$70/bbl from Q2 FY24 onwards. The implementation of the Kirit Parikh Committee’s recommendations from April 2023 has provided much-needed respite to upstream companies, as they had to sell gas below the cost of production for quite a long time. We build in gas price assumptions of $6.5/metric million British thermal unit for FY24-FY25E.The stock currently trades at a price/earning multiple of 6.4 times FY24E EPS. We value the stock at six times FY25E standalone adjusted earnings per share and add investments to arrive at our target price of Rs 345. We reiterate our 'Buy' rating on the stock..Click on the attachment to read the full report:.Oil India Q1 Results: Profit Falls 18%, Revenue Declines.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Oil India Q1 Results Review - Outlook Intact Amid Stable Performance: Motilal Oswal

Ebitda in line, but beat on profit after tax.

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