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3QFY11 EBITDA was 10.6% below our estimates despite in-line sales due to higher-thanexpected
statutory levies and emp. cost. Net crude realisation of US$67.14/bbl was 2.7% ahead
of estimates due to lower subsidy contribution. Despite lower EBITDA, PAT was in-line due to
substantially higher other income.
3QFY11 net sales of Rs24.7bn (+18.6% yoy, +0.3% qoq) were in-line with our expectations.
Crude sales volumes of 6.5mmbbls (+0.6% yoy, -3.9% qoq) was 1.3% below our estimates
though production was in-line. This was, however, compensated by higher net oil realisations
due to lower-than-estimated upstream subsidy contribution. Gas production and sales were
up 5.7% and 8.4% qoq possibly due to higher offtake by customers. Yoy sales growth was
driven by higher net oil realisations (+14.2%) while sales volumes were stagnant yoy.
During the quarter, Oil India (OIL) paid a subsidy of Rs5.6bn (+19.5% yoy, +40%qoq) which
was 3.8% below our expectations. Consequently net realisation of US$67.14/bbl was 2.7%
ahead of our expectations.
EBITDA at Rs13.1bn (+18.6% yoy, -6% qoq) was 10.6% below our expectation, despite inline
sales due to higher-than-expected statutory levies and employee cost. Other opex
includes Rs940m for revised salary and wages for earlier years. Adjusted for that EBITDA
was 4% below our estimates. Exploration expenses also rose sharply (+34.4% yoy, 23.7%
qoq) due to higher dry well write offs.
Despite lower EBITDA, PAT at Rs9.1bn was in-line due to substantially higher other income.
OIL reported other income of Rs2.8bn (+54% yoy, +64.6% qoq) vs our estimate of Rs770m.
This includes Rs515m on account of revision of transportation tariff for reverse pumping
sector pertaining to earlier years.
9MFY11 constitutes 78% of our full-year PAT estimates and 73% of our production estimates.
The company mentioned that Duliajan-Numaligarh Gas Pipeline (DNPL) is likely to be
completed by February 2011 which would enable OIL to sell 1mmscmd of incremental gas to
the Numaligarh Refinery. Our DCF-based target price of Rs1,460 assumes oil realisation cap
of US$60/bbl and oil production growing to 3.91mmt in FY13 (from 3.57mmt in FY10) as per
management guidance.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
3QFY11 EBITDA was 10.6% below our estimates despite in-line sales due to higher-thanexpected
statutory levies and emp. cost. Net crude realisation of US$67.14/bbl was 2.7% ahead
of estimates due to lower subsidy contribution. Despite lower EBITDA, PAT was in-line due to
substantially higher other income.
3QFY11 net sales of Rs24.7bn (+18.6% yoy, +0.3% qoq) were in-line with our expectations.
Crude sales volumes of 6.5mmbbls (+0.6% yoy, -3.9% qoq) was 1.3% below our estimates
though production was in-line. This was, however, compensated by higher net oil realisations
due to lower-than-estimated upstream subsidy contribution. Gas production and sales were
up 5.7% and 8.4% qoq possibly due to higher offtake by customers. Yoy sales growth was
driven by higher net oil realisations (+14.2%) while sales volumes were stagnant yoy.
During the quarter, Oil India (OIL) paid a subsidy of Rs5.6bn (+19.5% yoy, +40%qoq) which
was 3.8% below our expectations. Consequently net realisation of US$67.14/bbl was 2.7%
ahead of our expectations.
EBITDA at Rs13.1bn (+18.6% yoy, -6% qoq) was 10.6% below our expectation, despite inline
sales due to higher-than-expected statutory levies and employee cost. Other opex
includes Rs940m for revised salary and wages for earlier years. Adjusted for that EBITDA
was 4% below our estimates. Exploration expenses also rose sharply (+34.4% yoy, 23.7%
qoq) due to higher dry well write offs.
Despite lower EBITDA, PAT at Rs9.1bn was in-line due to substantially higher other income.
OIL reported other income of Rs2.8bn (+54% yoy, +64.6% qoq) vs our estimate of Rs770m.
This includes Rs515m on account of revision of transportation tariff for reverse pumping
sector pertaining to earlier years.
9MFY11 constitutes 78% of our full-year PAT estimates and 73% of our production estimates.
The company mentioned that Duliajan-Numaligarh Gas Pipeline (DNPL) is likely to be
completed by February 2011 which would enable OIL to sell 1mmscmd of incremental gas to
the Numaligarh Refinery. Our DCF-based target price of Rs1,460 assumes oil realisation cap
of US$60/bbl and oil production growing to 3.91mmt in FY13 (from 3.57mmt in FY10) as per
management guidance.
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