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Oil India Limited- Buy
3Q results in line with estimate; net oil realisation up QoQ
Oil India reports INR9.1bn net profit; in line with estimates
Oil India (OIL) reported net profit at INR9.1bn (+27% YoY and -1% QoQ)
and EBITDA at INR13.1bn (+19% YoY, -6% QoQ), in line with estimates. As
expected, net crude realization at US$67.1/bbl (+14% YoY, +6% QoQ) was
sequentially higher because of higher crude oil prices. This validates our
view that post petrol price deregulation, Oil India has a marginal positive
impact from rising oil prices. OIL's subsidy contribution increased in the
quarter to INR5.6bn (+20% YoY, +40% QoQ). Oil production at 0.93mn te
(+1.9% yoy, -0.5% qoq) and gas production at 0.62bcm (-1.6% yoy, +5.7%
qoq) was also in line with estimates.
Earnings to remain robust; reiterate Buy
We expect earnings to remain robust going ahead as net realisations are
expected to rise due to fuel price reforms and high gas prices. We expect
oil production volumes to increase as OIL picks up stake in international
fields like the recent stake in Carabobo (Venezuela) and also domestic gas
sales volumes to grow with commissioning of DNPL pipeline and Brahmaputra Cracker (BCPL). We reiterate our Buy on Oil India with TP of 1620. The
company is trading at EV/2P reserves of US$5.0/bbl on FY12E which is over
30% discount to its regional peers.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Oil India Limited- Buy
3Q results in line with estimate; net oil realisation up QoQ
Oil India reports INR9.1bn net profit; in line with estimates
Oil India (OIL) reported net profit at INR9.1bn (+27% YoY and -1% QoQ)
and EBITDA at INR13.1bn (+19% YoY, -6% QoQ), in line with estimates. As
expected, net crude realization at US$67.1/bbl (+14% YoY, +6% QoQ) was
sequentially higher because of higher crude oil prices. This validates our
view that post petrol price deregulation, Oil India has a marginal positive
impact from rising oil prices. OIL's subsidy contribution increased in the
quarter to INR5.6bn (+20% YoY, +40% QoQ). Oil production at 0.93mn te
(+1.9% yoy, -0.5% qoq) and gas production at 0.62bcm (-1.6% yoy, +5.7%
qoq) was also in line with estimates.
Earnings to remain robust; reiterate Buy
We expect earnings to remain robust going ahead as net realisations are
expected to rise due to fuel price reforms and high gas prices. We expect
oil production volumes to increase as OIL picks up stake in international
fields like the recent stake in Carabobo (Venezuela) and also domestic gas
sales volumes to grow with commissioning of DNPL pipeline and Brahmaputra Cracker (BCPL). We reiterate our Buy on Oil India with TP of 1620. The
company is trading at EV/2P reserves of US$5.0/bbl on FY12E which is over
30% discount to its regional peers.
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