MOSL: OIL INDIA (Buy)-EBITDA miss driven by employee cost provisioning
OIL INDIA: EBITDA miss driven by employee cost provisioning
(OINL IN, Mkt Cap USD2.5b, CMP INR165, TP INR216, 31% Upside, Buy)
- 2QFY20 revenue was 5% higher than est. at INR32.1b (-14% YoY), led by higher gas sale and higher than expected net realization.
- EBITDA was 12% lower than est. at INR12.4b (-16% YoY) due to higher employee cost (+37% YoY, +21% QoQ). Till 1HFY20, a total provisioning of INR4.4b has been made toward pay revision of Unionized Employees due from 1st Jan'17. Total other expenditure was lower at USD5.9/boe v/s USD9.4/boe in 2QFY19.
- PBT for the quarter was down 23% YoY to INR9.7b, led by higher depreciation cost of INR4.2b. Depreciation cost was at USD5.0/boe v/s USD4.4/boe in 2QFY19.
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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