Prabhudas Lilladher's research report on Oil India
We attended the analyst meet of Oil India (OINL). Management guided strong volume growth FY25E to be a watershed year, driven by commissioning of major oil and gas expansion along with Numaligarh Refinery’s (NRL) expansion projects. Some key highlights are 1) Oil and gas production to increase by 30% and 70% respectively post completion of major projects in Assam 2) NRL refinery’s expansion to 9MTPA from current 3MTPA to come on stream by FY25E 3) No imposition of windfall taxes after two years of depressed profits and 4) No price cap on gas prices. OINL is well placed to benefit from rising oil and gas prices and high GRMs and FY25E EBIDTA can increase to Rs210bn (FY22-Rs105bn) on higher volumes.
Outlook
We maintain our estimates and retain ‘BUY’ with a PT of Rs344 based on 3.5x EV/E FY24E.
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