MOSL: OIL INDIA (Buy)-Results below expectations, EBITDA impacted higher other expenditure
Oil India: Results below expectations, EBITDA impacted higher other expenditure
(OINL IN,Mkt Cap USD3.4b, CMP INR212, TP INR296, 40% Upside, Buy)
- OINL’s revenue of INR33.9b (+45% YoY, +13% QoQ) was below our estimate of INR35b, led by lower crude oil sales/production ratio and lower realization. Crude oil sales/production ratio stood at 96% (est. of 98%) and realization stood at USD72/bbl (est. of USD73.8/bb). EBITDA of INR14b (+61% YoY, +76% QoQ), too, was below our estimate of INR15.8b, led by higher other expenditure of USD8.8/boe (est. of USD5.7/boe; USD5.4 in 1QFY18, USD12 in 4QFY18). Other expenditure was impacted mainly by higher (a) write-offs of ~INR1.2b v/s INR476m in 1QFY18 and (b) a forex loss of INR1.05b. PAT of INR7b (est. of INR10.4b; +56% YoY, -19% QoQ) was further impacted by (a) lower other income of INR1.3b (est. of INR4b; -18% YoY, -84% QoQ) and (b) a higher tax rate of 35.2% (est. of 33%).
- Realization at USD72/bbl: In 1QFY19, gross realization stood at USD72/bbl (+49% YoY, +11% QoQ), led by rising crude oil prices.
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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