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Oil India Ltd -Good performance…
Oil India declared its Q3FY11 results with revenues of | 2,473.3 crore,
EBITDA of | 1312.8 crore and PAT of | 908 crore. The revenues and
profits were marginally above our expectations. The net crude oil
realisation increased 14.2% YoY to US$67.1 per barrel on account of
higher crude oil prices in Q3FY11. The reforms by the government on
June 25 in pricing of petroleum products has also reduced Oil India’s
subsidy burden and improved its profitability. However, we have
reduced our oil production assumption of Oil India marginally to 27.1
mmboe and 28.2 mmboe and gas production to 2640 mmscm and 2840
mmscm in FY12E and FY13E, respectively. We believe Oil India’s large
reserve base and new discoveries would create value for investors,
going ahead. We recommend a BUY rating on the stock with a price
target of | 1590 based on 11.5x FY12E EPS.
Highlights of the quarter
Crude oil production increased 1.9% YoY to 6.72 mmboe in
Q3FY11. The gas production declined 1.6% YoY to 583 mmscm in
Q1FY11 on lower offtake by its customers. Oil India’s net crude oil
realisation increased 14.2% YoY from US$58.8 per barrel in Q3FY10
to US$63.2 per barrel in Q3FY11. Also, the increase in APM gas
prices led to a YoY improvement in profitability.
Valuation
We believe Oil India’s large reserve base and new discoveries would
create value for investors, going ahead. The reforms by the Indian
government will drive the earnings of the company. Oil India is trading at
9.7x FY12E and 9.5x FY13E EPS of | 138.3 and | 140.3, respectively. We
recommend a BUY rating on the stock with a price target of | 1590 based
on 11.5x FY12E EPS.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Oil India Ltd -Good performance…
Oil India declared its Q3FY11 results with revenues of | 2,473.3 crore,
EBITDA of | 1312.8 crore and PAT of | 908 crore. The revenues and
profits were marginally above our expectations. The net crude oil
realisation increased 14.2% YoY to US$67.1 per barrel on account of
higher crude oil prices in Q3FY11. The reforms by the government on
June 25 in pricing of petroleum products has also reduced Oil India’s
subsidy burden and improved its profitability. However, we have
reduced our oil production assumption of Oil India marginally to 27.1
mmboe and 28.2 mmboe and gas production to 2640 mmscm and 2840
mmscm in FY12E and FY13E, respectively. We believe Oil India’s large
reserve base and new discoveries would create value for investors,
going ahead. We recommend a BUY rating on the stock with a price
target of | 1590 based on 11.5x FY12E EPS.
Highlights of the quarter
Crude oil production increased 1.9% YoY to 6.72 mmboe in
Q3FY11. The gas production declined 1.6% YoY to 583 mmscm in
Q1FY11 on lower offtake by its customers. Oil India’s net crude oil
realisation increased 14.2% YoY from US$58.8 per barrel in Q3FY10
to US$63.2 per barrel in Q3FY11. Also, the increase in APM gas
prices led to a YoY improvement in profitability.
Valuation
We believe Oil India’s large reserve base and new discoveries would
create value for investors, going ahead. The reforms by the Indian
government will drive the earnings of the company. Oil India is trading at
9.7x FY12E and 9.5x FY13E EPS of | 138.3 and | 140.3, respectively. We
recommend a BUY rating on the stock with a price target of | 1590 based
on 11.5x FY12E EPS.
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