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H i g h e r n e t r e a l i s a t i o n b o o s t s p e r f o r m a n c e …
Oil India declared its Q2FY12 results with revenues of | 3,357.1 crore,
EBITDA of | 1,707.0 crore and PAT of | 1138.5 crore. The revenues as
well as profitability were above our expectations. Oil India’s share of the
total upstream companies’ subsidy burden is 11.9% in Q2FY12 at | 844.4
crore. The net crude oil realisation increased 36.6% YoY to US$86.3 per
barrel in Q2FY12 due to lower subsidy burden (upstream share at 33.3%
for the quarter) of | 844.4 crore in Q2FY12, a 52.5% QoQ decline from |
1780.7 crore in Q1FY12. The EBITDA margin declined 580 bps YoY to
50.8% mainly on account of a one-off provision of | 285.7 crore for the
differential superannuation benefit to employees resulting in a 3.3x YoY
increase in other expenditure. We have assumed the subsidy sharing
ratio of upstream companies at 38.7% for the rest of FY12E and FY13E till
further clarity from the government. Also, we have increased Oil India’s
share among upstream companies to 12.2%, going forward. This reduces
our EPS estimates to | 140 and | 152.1 in FY12E and FY13E, respectively.
We recommend a BUY rating on the stock with a price target of | 1460
(10x average of FY12E and FY13E EPS).
ƒ Highlights of the quarter
The crude oil production increased 4.5% YoY to 7.02 mmboe in
Q2FY12 while gas production increased 16.1% YoY to 677 mmscm.
The company’s topline of | 3357.1 crore in Q2FY12 exhibited a
36.1% YoY growth mainly on account of higher net crude oil
realisation ($86.3 /barrel) and higher transportation revenue (| 230.0
crore in Q2FY12 against | 38.7 crore in Q2FY11). Recognition of a
revenue item of | 139.9 crore due to tariff revision led to such a
steep increase in transportation revenues.
V a l u a t i o n
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. At the CMP of | 1278,
the stock is trading at 9.1x FY12E and 8.4x FY13E EPS of | 140 and |
152.1, respectively. We recommend a BUY rating on the stock with a
price target of | 1460
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
H i g h e r n e t r e a l i s a t i o n b o o s t s p e r f o r m a n c e …
Oil India declared its Q2FY12 results with revenues of | 3,357.1 crore,
EBITDA of | 1,707.0 crore and PAT of | 1138.5 crore. The revenues as
well as profitability were above our expectations. Oil India’s share of the
total upstream companies’ subsidy burden is 11.9% in Q2FY12 at | 844.4
crore. The net crude oil realisation increased 36.6% YoY to US$86.3 per
barrel in Q2FY12 due to lower subsidy burden (upstream share at 33.3%
for the quarter) of | 844.4 crore in Q2FY12, a 52.5% QoQ decline from |
1780.7 crore in Q1FY12. The EBITDA margin declined 580 bps YoY to
50.8% mainly on account of a one-off provision of | 285.7 crore for the
differential superannuation benefit to employees resulting in a 3.3x YoY
increase in other expenditure. We have assumed the subsidy sharing
ratio of upstream companies at 38.7% for the rest of FY12E and FY13E till
further clarity from the government. Also, we have increased Oil India’s
share among upstream companies to 12.2%, going forward. This reduces
our EPS estimates to | 140 and | 152.1 in FY12E and FY13E, respectively.
We recommend a BUY rating on the stock with a price target of | 1460
(10x average of FY12E and FY13E EPS).
ƒ Highlights of the quarter
The crude oil production increased 4.5% YoY to 7.02 mmboe in
Q2FY12 while gas production increased 16.1% YoY to 677 mmscm.
The company’s topline of | 3357.1 crore in Q2FY12 exhibited a
36.1% YoY growth mainly on account of higher net crude oil
realisation ($86.3 /barrel) and higher transportation revenue (| 230.0
crore in Q2FY12 against | 38.7 crore in Q2FY11). Recognition of a
revenue item of | 139.9 crore due to tariff revision led to such a
steep increase in transportation revenues.
V a l u a t i o n
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. At the CMP of | 1278,
the stock is trading at 9.1x FY12E and 8.4x FY13E EPS of | 140 and |
152.1, respectively. We recommend a BUY rating on the stock with a
price target of | 1460
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