Buy Oil India, target price Rs 255: HDFC Securities

HDFC Securities has buy call on Oil India with a target price of Rs 255.0. The current market price of Oil India is Rs 191.35.

Oil India, incorporated in the year 1959, is a Mid Cap company (having a market cap of Rs 21465.80 crore) operating in Gas & Petroleum sector.

Oil India key Products/Revenue Segments include Oil Crude, Gas Natural, Income From Transportation Services, Other Operating Revenue, Renewable Energy System, Condensate and Income from OFC Fibre Leasing for the year ending 31-Mar-2021.

Financials
For the quarter ended 30-06-2022, the company has reported a Consolidated Total Income of Rs 11645.49 crore, up 25.29 % from last quarter Total Income of Rs 9294.52 crore and up 85.54 % from last year same quarter Total Income of Rs 6276.58 crore. Company has reported net profit after tax of Rs 3140.92 crore in latest quarter.

Investment Rationale
Our BUY recommendation on Oil India with a target price of Rs 255 is premised on (1) increase in crude price realisation and (2) improvement in domestic gas price realisation, the brokerage said. Q1FY23 revenue/EBITDA/APAT stood at Rs 60/26/16bn, below our estimate, impacted by higher-than-expected provisions that resulted in higher other expenses and below estimate other income, it added.

Promoter/FII Holdings
Promoters held 56.66 per cent stake in the company as of 30-Jun-2022, while FIIs owned 12.42 per cent, DIIs 15.53 per cent.