Emkay Global Financial has given Buy recommendation for Oil India with a target price of Rs. 305 in its research report issued on Jun 04, 2022
Emkay Global Financial’s report on Oil India
Q4FY22 S/A revenue/EBITDA/APAT of Rs44.8bn/Rs19.6bn/Rs16.3bn beat our estimates by 2%/10%/16%. EBITDA beat was led by Rs185mn of negative dry well write-offs. PAT was led by low DD&A at Rs2.1bn (down ~50% yoy/qoq), partly offset by low other income. Nominated block (NB) crude output rose 5% yoy to 0.743mmt (3% beat), while gas was up 15% at 0.703bcm (5% beat). Transportation income was down 9% yoy at Rs709mn. Gas sales/production ratio fell to 76% vs. 80-85% usually. NB crude realization rose 25% qoq to USD98.1/bbl, with a USD1.5 discount to Brent vs. USD0.8/bbl in Q3. Gas realization was in line at USD3.1/mmbtu. NRL’s basic GRM was strong at USD25.3/bbl, with PAT up 20% yoy at Rs11.3bn in Q4.
We lower our FY23E/24E EPS by 13%/14%, factoring in higher opex and revenue realignment. Accordingly, we lower our DCF-SOTP based TP by 9% to Rs305, factoring in lower dividends from NRL due to capex. Retain Buy rating.