MOSL: OIL INDIA (Buy)-Adj. EBITDA ahead of expectation
​Oil India: Adj. EBITDA ahead of expectation
(OINL IN, Mkt Cap USD3.9b, CMP INR314, TP INR363, 16% Upside, Buy)
- 4QFY17 net sales of INR24.4b (+28% YoY, +2% QoQ) were marginally below our estimate of INR25.2b. OINL's reported EBITDA of INR5.9b (+0% YoY, -11% QoQ) too was below our estimate of INR7.0b. Adjusted for one-time gratuity payment of INR1.8b, EBITDA at INR7.7b was higher than our estimate of INR7.0b.
- Higher-than-expected depreciation of INR3.3b (est. of INR2.3b; +11% YoY, +19% QoQ) and higher other income of INR8.7b (est. of INR3.1b; +60% YoY, +170% QoQ) due to higher dividend income resulted in higher difference at PBT level. It also made an exceptional payment of INR11.5b for differential onshore royalty payment.
- Adj. PAT came in at INR11.7b (est. of INR4.6b; +71% YoY, +158% QoQ). It has paid total dividend of INR14.4/share.
- For FY17, EBITDA stood at INR27.8b (-9.3% YoY) due to higher expenditure and employee cost, despite higher realization (+4.5% YoY). Adj. PAT stood at INR27b (+7% YoY) due to higher other income and a lower effective tax rate.
- Realization at USD52.5/bbl: In 4QFY17, gross/net realization stood at USD52.5/bbl (est. of USD52.8; +61% YoY, +7% QoQ), led by higher oil prices. Oil production stood at 0.825mmt (+7% YoY, +0% QoQ) and gas at 0.74bcm (+1% YoY, -2% QoQ). For FY17, gross/net realization stood at USD52.5/bbl against pre/post subsidy realization of USD46.4/45.3/bbl in FY16.
Oil India is a fully integrated upstream petroleum company based in India. Co. is engaged in the exploration, development and production of crude oil and natural gas, transportation of crude oil and production of Liquid Petroleum Gas (LPG). Co. also provides various Exploration & Production (E&P) related services and holds an interest in the Numaligarh Refinery. Co. conducts the majority of its activities in North East India as well as Rajasthan. Additionally, Co.'s is active in Ganga Valley and Mahanadi and has participating interests in Mahanadi Offshore, Mumbai Deepwater, Krishna Godavari Deepwater, etc. as well as various overseas projects in Libya, Gabon, U.S.A., Nigeria and Sudan.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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