Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
1QFY12 results
Oil India’s 1QFY12 net profits rose 70%YoY/51%QoQ to Rs35.3/sh –
higher than expected on the back of higher than expected crude
revenues, lower recouped costs and higher other income. Crude output
rose 1%QoQ while gas output rose 6% after the completion of a key
pipeline. The policy interventions of Jun-11 and the full year impact of the
APM gas price hike in Jun-10 will allow Oil India to report a 43% EPS
growth in FY12. Production growth will allow net to rise in the years
ahead too. Valuations (7x PE, ~2.5x EV/Ebitda) are undemanding. BUY.
1QFY12 better than estimates
Oil India’s 1QFY12 net profits rose 70%YoY/51%QoQ to Rs8.5bn (Rs35.3/sh)
and was better than expectations on the back of higher crude revenues.
Crude sales (~76kbpd) as well as realisations (US$116/bbl gross, US$60/bbl
net) surprised positively. Higher than expected other income and lower
recouped costs (lower seismic and exploratory drilling) also helped but was
partly offset by higher dry-well well (Rs850-900m) and other provisions.
Oil and gas production growth impresses again
Oil India’s crude production growth continues to impress; production was up
another 1%QoQ to 75.8kbpd and is currently tracking at 76.7kbpd helped by
small discoveries and gains from IOR. Gas production also ramped up to
7mmscmd in the quarter on the completion of the Duliajan-Numaligarh
pipeline in Mar-11 through which NRL is currently drawing 0.8mmscmd.
We expect strong EPS growth in FY12
Oil India has met 21% of our full year net profit estimates in the quarter but
we expect the quarterly profit run-rate to accelerate in the rest of FY12 on
the back of the Jun-11 policy interventions. Together with the full year impact
of the Jun-10 APM gas price hikes, oil and gas production growth and higher
other income will drive a 43% EPS growth in FY12. We expect output growth
to continue to drive net profit growth in the years ahead as well.
Attractive valuations; maintain BUY
While we concede that the subsidy sharing framework remains ad-hoc, our
conversations indicate that upstream share is likely to stabilise at one-third
for FY12. Further, Oil India’s sensitivity to an adverse change in subsidy share
is also low (1ppt = 0.7% on EPS). In addition, a potential cap on the
availability of subsidised LPG cylinders can be a 4-5% EPS tailwind. In this
and in light of Oil India’s strong production and reserve base fundamentals,
we find valuations (7x PE, 2.5x EV/Ebitda) as very attractive. Its strong
balance sheet (Rs528/sh cash, 42% of m-cap) is an additional cushion. BUY.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
1QFY12 results
Oil India’s 1QFY12 net profits rose 70%YoY/51%QoQ to Rs35.3/sh –
higher than expected on the back of higher than expected crude
revenues, lower recouped costs and higher other income. Crude output
rose 1%QoQ while gas output rose 6% after the completion of a key
pipeline. The policy interventions of Jun-11 and the full year impact of the
APM gas price hike in Jun-10 will allow Oil India to report a 43% EPS
growth in FY12. Production growth will allow net to rise in the years
ahead too. Valuations (7x PE, ~2.5x EV/Ebitda) are undemanding. BUY.
1QFY12 better than estimates
Oil India’s 1QFY12 net profits rose 70%YoY/51%QoQ to Rs8.5bn (Rs35.3/sh)
and was better than expectations on the back of higher crude revenues.
Crude sales (~76kbpd) as well as realisations (US$116/bbl gross, US$60/bbl
net) surprised positively. Higher than expected other income and lower
recouped costs (lower seismic and exploratory drilling) also helped but was
partly offset by higher dry-well well (Rs850-900m) and other provisions.
Oil and gas production growth impresses again
Oil India’s crude production growth continues to impress; production was up
another 1%QoQ to 75.8kbpd and is currently tracking at 76.7kbpd helped by
small discoveries and gains from IOR. Gas production also ramped up to
7mmscmd in the quarter on the completion of the Duliajan-Numaligarh
pipeline in Mar-11 through which NRL is currently drawing 0.8mmscmd.
We expect strong EPS growth in FY12
Oil India has met 21% of our full year net profit estimates in the quarter but
we expect the quarterly profit run-rate to accelerate in the rest of FY12 on
the back of the Jun-11 policy interventions. Together with the full year impact
of the Jun-10 APM gas price hikes, oil and gas production growth and higher
other income will drive a 43% EPS growth in FY12. We expect output growth
to continue to drive net profit growth in the years ahead as well.
Attractive valuations; maintain BUY
While we concede that the subsidy sharing framework remains ad-hoc, our
conversations indicate that upstream share is likely to stabilise at one-third
for FY12. Further, Oil India’s sensitivity to an adverse change in subsidy share
is also low (1ppt = 0.7% on EPS). In addition, a potential cap on the
availability of subsidised LPG cylinders can be a 4-5% EPS tailwind. In this
and in light of Oil India’s strong production and reserve base fundamentals,
we find valuations (7x PE, 2.5x EV/Ebitda) as very attractive. Its strong
balance sheet (Rs528/sh cash, 42% of m-cap) is an additional cushion. BUY.
No comments:
Post a Comment