Oil India surges 15% in three days on strong March quarter results

Analysts remain bullish on prospects of the company due to increase in crude price realisation and improvement in domestic gas price realisation.

Shares of Oil India (OIL) were up 5 per cent to Rs 250 on the BSE in Wednesday’s trade, surging 15 per cent in the past three trading days. The surge comes after the company reported strong earnings in March 2022 quarter (Q4FY22), as turnover and profit after tax (PAT) increased by 74 per cent and 92 per cent, respectively.

Earlier, the stock of state-owned oil exploration and production company had hit a 52-week high of Rs 267.70 on October 1, 2021.

Meanwhile, the company reported its highest-ever quarterly net profit of Rs 1,630 crore in Q4FY22, as it received nearly $100 a barrel price for oil - produced and sold. The net profit during quarter almost doubled, as compared to Rs 847.56 crore profit in the same period last year.

OIL has become the first company in the country to commission a pilot plant of 100 kilowatt (KW) capacity to produce green hydrogen in Assam. The plant is based on Anion Exchange Membrane (AEM) technology, in order to produce green hydrogen of 99.99 per cent purity. Besides that, the company has also entered into collaboration with start-ups for development of green hydrogen utilities.

"Four major infrastructure projects were also commissioned in the state of Assam during 2021-22 which will further enhance the oil and gas production capabilities of the company," the management said.

That apart, analysts at HDFC Securities believe that the stock is a favourable 'buy' after an increase in crude price realisation and improvement in domestic gas price.

“Oil price realisation for FY22 improved to USD 76.7/bbl vs USD 43/bbl in FY21, given the expected global economic rebound, post covid-19. Earnings before interest, taxes, depreciation, and amortization (EBITDA) was 1 per cent higher at Rs 2,000 crore than the estimate, owing to lower-than-expected employee expenses and lower other expenses. Meanwhile, the reported PAT came in 29 per cent above the estimate, given lower depreciation, higher other income, and lower tax rate of 20 per cent,” the brokerage firm added, sharing a target price of Rs 300 on the counter.