Oil India Q4 Results Review - Production Growth Key Monitorable: Prabhudas Lilladher

Prabhudas Lilladher Report

Oil India Ltd. reported an Ebitda of Rs 23.4 billion (+11% QoQ, our estimate: Rs 21.5 billion). Adjusted profit after tax came in at Rs 20.3 billion (+28% QoQ, our estimate: Rs 13 billion) on standalone basis. Increase in PAT was on account of higher than expected other income and lower depreciation and finance cost.

Total oil and gas production fell by 1% and 2% QoQ. The company announced a final dividend of Rs 3.75/share and a bonus of 1:2 (1 bonus share for every two shares held).

Oil India expects production to reach 4 mmt of oil and 5 bcm of gas by FY26. If the company achieves this production target, FY26 EPS would come in at Rs 73. However, on a conservative basis, we build in a 5% CAGR in oil and 10% CAGR in gas production over FY24-26E, resulting in EPS of Rs 67.3.

We maintain ‘Accumulate’ rating on better visibility of production growth, valuing the standalone business at nine times FY26 adjusted EPS and adding the value of investments to arrive at our target price of Rs 722.

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