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I n l i n e w i t h e s t i m a t e s …
Oil India declared its Q1FY12 results with revenues of | 2,366.1 crore,
EBITDA of | 1,241.2 crore and PAT of | 849.6 crore. Revenues as well as
profits were in line with our expectations. However, Oil India’s share
among upstream companies (upstream burden at 33.3% for the quarter)
increased from 10.9% in FY11 to 12.3% in Q1FY12. The net crude oil
realisation increased 19.9% YoY to US$59.6 per barrel in Q1FY12 due to
higher gross crude oil realisation. We have modelled net oil realisations of
US$65 per barrel and US$66.8 per barrel for FY12E and FY13E,
respectively, post the increase in petroleum products prices recently. We
estimate oil production of Oil India at 27.2 mmboe and 28.3 mmboe and
gas production at 2621 mmscm and 2840 mmscm in FY12E and FY13E,
respectively. On a conservative basis, we have assumed the subsidy
sharing ratio of upstream companies at 38.3% for the rest of FY12E and
FY13E till further clarity from the government. Also, we have increased
Oil India’s share among upstream companies at 12.3%, going forward,
which reduces our EPS estimates to | 149.3 and | 157.4 in FY12E and
FY13E, respectively. We believe the worst case scenario for the stock has
been priced by the markets. We recommend a BUY rating on the stock
with a price target of | 1533 (10x average of FY12E and FY13E EPS).
ƒ Highlights of the quarter
The crude oil production increased 19.9% YoY to 6.9 mmboe in
Q1FY12. The gas production increased 15.9% YoY to 641 mmscm in
Q1FY11 on account of higher offtake by its customers. Oil India’s net
crude oil realisation increased 19.9% YoY from US$49.7 per barrel
in Q1FY11 to US$59.6 per barrel in Q1FY12. The increase in the
APM gas prices last year and higher net crude oil realisations led to
an improvement in profitability YoY.
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. Oil India is trading at
8.8x FY12E and 8.4x FY13E EPS of | 149.3 and | 157.4, respectively. We
recommend a BUY rating on the stock with a price target of | 1533.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
I n l i n e w i t h e s t i m a t e s …
Oil India declared its Q1FY12 results with revenues of | 2,366.1 crore,
EBITDA of | 1,241.2 crore and PAT of | 849.6 crore. Revenues as well as
profits were in line with our expectations. However, Oil India’s share
among upstream companies (upstream burden at 33.3% for the quarter)
increased from 10.9% in FY11 to 12.3% in Q1FY12. The net crude oil
realisation increased 19.9% YoY to US$59.6 per barrel in Q1FY12 due to
higher gross crude oil realisation. We have modelled net oil realisations of
US$65 per barrel and US$66.8 per barrel for FY12E and FY13E,
respectively, post the increase in petroleum products prices recently. We
estimate oil production of Oil India at 27.2 mmboe and 28.3 mmboe and
gas production at 2621 mmscm and 2840 mmscm in FY12E and FY13E,
respectively. On a conservative basis, we have assumed the subsidy
sharing ratio of upstream companies at 38.3% for the rest of FY12E and
FY13E till further clarity from the government. Also, we have increased
Oil India’s share among upstream companies at 12.3%, going forward,
which reduces our EPS estimates to | 149.3 and | 157.4 in FY12E and
FY13E, respectively. We believe the worst case scenario for the stock has
been priced by the markets. We recommend a BUY rating on the stock
with a price target of | 1533 (10x average of FY12E and FY13E EPS).
ƒ Highlights of the quarter
The crude oil production increased 19.9% YoY to 6.9 mmboe in
Q1FY12. The gas production increased 15.9% YoY to 641 mmscm in
Q1FY11 on account of higher offtake by its customers. Oil India’s net
crude oil realisation increased 19.9% YoY from US$49.7 per barrel
in Q1FY11 to US$59.6 per barrel in Q1FY12. The increase in the
APM gas prices last year and higher net crude oil realisations led to
an improvement in profitability YoY.
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. Oil India is trading at
8.8x FY12E and 8.4x FY13E EPS of | 149.3 and | 157.4, respectively. We
recommend a BUY rating on the stock with a price target of | 1533.
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