HDFC Securities' research report on Oil India
OIL reported net revenue of Rs 33.73bn, up 9.3% QoQ owing to 4.6% increased in crude oil sales volumes and 6.0% jumped in crude oil realisation. EBITDA increased 25% QoQ to Rs 13.53bn while APAT increased 30.3% to Rs 6.25 bn. Oil price realisation was USD 66.3/bbl (-7.9/+7.4% YoY/ QoQ). Gas price realisation was USD 3.6/mmbtu, +21.6/10.6% YoY/QoQ. Oil sales volume was up 0.2/4.6% YoY/QoQ to 0.81mmt. Gas sales volume was 0.61bcm, +2.7/-1.1% YoY/QoQ. There was no subsidy burden in the quarter. Crude oil and natural gas production volumes will increase at 3.0% and 2.0% CAGR over FY19-22E. The surge in oil supply from US coupled with fall in global oil demand owing to trade war between US-China will result in subdued oil prices in the near term. Thus, we expect oil realisation to fall from USD 66.33/bbl in 1Q to USD 61/bbl in FY21.
Outlook
We maintain BUY on Oil India post an in-line 1QFY20. Although we do agree that there are concerns over lack of production growth for OIL, we think that the current valuations (2.3x FY21 EV/EBITDA and 4.7x FY21 PER) indicate strong pessimism.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest business news, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!