Oil India Ltd. (OIL) | Q2FY15 Result Update | PAT down 33% YoY due to higher subsidy burden :: India Nivesh

Please Share::

�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��

��

-->
Oil India reported Q2FY15 PAT below our expectation due to higher than expected
subsidy burden. Revenue decreased by 23% y-o-y and 17% q-o-q to Rs 21.92 bn
(below our expectation of Rs 28.20 bn) dragged by lower net realization. Revenue
from crude oil decreased by 31% y-o-y to Rs. 15.58 bn while revenue from natural
gas increases by 7% y-o-y to Rs. 4.7 bn. Net realization stood at USD 45.3/bbl v/s
USD52.4/bbl in Q1FY15 and USD52.3/bbl in Q2FY14. In Rupee term net realization
decreased by 15.4% y-o-y to Rs 2745 /bbl. Oil India shared subsidy burden of Rs
22.38 bn in Q2FY15 (our expectation was Rs. 13 bn) vs. Rs. 18.46 bn Q1FY15 and
Rs. 22.33 bn in Q2FY14. The company has received notice of demand for Rs 13.24
bn from Assam Value Added Tax Authority, claiming tax on sharing of under
recoveries to downstream oil companies and on transportation charges on crude
oil. The company is contesting the demand and filed a petition before high court.
PAT down 33% YoY due to higher subsidy burden
Rs.mn Q2FY15 Q1FY15 Q2FY14 Q‐o‐Q % Y‐o‐Y % INSPL Q2FY15e Variance(%)
Revenue 21925 26553 28364 ‐17 ‐23 28206 ‐22.27
EBIDTA 8092 12552 14512 ‐36 ‐44 14109 ‐42.65
PAT 6083 8519 9036 ‐29 ‐33 9939 ‐38.79
Adjusted PAT 6083 8519 9036 ‐29 ‐33 9939 ‐38.79
Source: Company Filings; IndiaNivesh Research
On operational front, crude oil production de-grew by 4% y-o-y(up 4.15% QoQ) to
0.879 MMT while natural gas production increased by 4% y-o-y and 2.5% q-o-q to
0.694 BCM. EBITDA margin contracted 1459 bps y-o-y to 38.9 % due to lower net
realization. Other expenditure increased (as a percentage of Net Sales) from 11.5%
in Q1FY15 to 15.4% in Q2Y15 due to inclusion of Rs. 293 mn foreign exchange loss.
Net profit decreased by 33% y-o-y and 29% q-o-q to Rs 6.08 bn (below our
expectation of Rs 9.93 bn) on account of higher than expected subsidy burden. We
believe government’s move to deregulation of diesel prices, revival in volume and
increase in natural gas prices are key positive, boost the profitability of Oil India
from H2FY15. Further any reduction in LPG and kerosene would be key catalyst for
the company

LINK
http://www.indianivesh.in/Admin/Upload/635514663779036250_OIL%20India_Q2FY15%20Result%20Update.pdf