Target: ₹766
CMP: ₹668.10
Oil India reported an EBITDA of ₹2,470 crore (up 5.6 per cent QoQ, PL Capital expectations: ₹2,520 crore). PAT came in at ₹1,470 crore (down 27.7 per cent QoQ, PLe: ₹1,890 crore) on standalone basis. Decline in PAT was on account of lower other income.
Total oil and gas production grew by 2.7 per cent and 1.6 per cent QoQ, respectively. The company has guided for a production target of 4mmt of oil and 5bcm of gas by FY26. On a conservative basis, we build in 8 per cent and 16 per cent volume CAGR over FY24-26 to 3.9 mmt of oil and 4.3bcm of gas, respectively, by FY26.
Net oil realisation at $75/bbl continues to remain at comfortable levels and gas realisation would rise by $0.25/mmBtu to $6.75/mmBtu from April 1, 2025. NRL’s expansion project cost stands at ₹28,000 crore, out of which capex of ₹19,000 crore has already been incurred. About 65 per cent physical progress has been achieved, and the expansion is expected to be completed by Dec’25.
Standalone debt stands at ₹11,300 crore, primarily related to the Mozambique project. NRL debt stands at ₹9,500 crore.
We maintain ‘Buy’ rating, valuing the standalone business at 12x FY26 adj EPS and adding the value of investment in NRL to arrive at our TP of ₹766.