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Informist, Tuesday, May 20, 2025

By Ashutosh Pati

MUMBAI – State-owned Oil India Ltd. is expected to show a sequential recovery in its net profit and revenue for the Jan-Mar quarter due to better crude oil realisation. However, on an annual basis, the company is likely to report a fall in both revenue and net profit because of lower crude oil prices and declining sales volumes.

The upstream crude oil and natural gas explorer and producer is expected to post a net profit of INR 14.38 billion for the March quarter, up nearly 18% on quarter, according to an average of estimates of eight broking firms. The net profit is expected to be down over 29% on year. Nomura Equity Research has the lowest estimate for the company's net profit at INR 11.90 billion, while Kotak Institutional Equities has the highest estimate of INR 18.50 billion.

Oil India's revenue for the March quarter is expected to rise 2% on quarter and decline 3% on year to INR 53.55 billion. Motilal Oswal Financial Services Ltd. has the lowest estimate for the company's revenue at INR 51.70 billion and Emkay Global Financial Services Ltd. has the highest estimate of INR 55.38 billion.

The company's earnings before interest, tax, depreciation, and amortisation for the March quarter is pegged at INR 22.65 billion, down 2% sequentially and nearly 3% on year, according to the average of estimates of eight brokerages. Estimates for the company's EBITDA range from INR 20.00 billion to INR 25.48 billion.

However, brokerages Emkay Global, ICICI Securities Ltd., and JM Financial Services Ltd. expect a sequential uptick of 7%, 3%, and 10% in the company's EBITDA during the March quarter. Emkay Global has attributed the rise in EBITDA to higher oil sales.

Emkay expects Oil India‘s crude oil realisation to be $75.70 per barrel in the March quarter. JM Financial expects Oil India's net crude oil realisation to be around $72-74 per barrel in the quarter, tracking the change in price of Brent crude oil. Brent crude oil prices averaged higher at $75.70 per barrel in Jan-Mar, up from $74.70 per barrel in Oct-Dec, according to the brokerage. In the December quarter, Oil India had reported realisation of $73.82 per barrel on crude oil.

A fall in sales volume is likely to drag the company's net profit and revenue lower on a yearly basis. Kotak expects crude oil sales volume in the March quarter at 817,00 tonnes, down 3% on year. Motilal Oswal expects the company's oil sales volume to have fallen 6% on year to 790,000 tonnes. While most brokerages expect lower oil and gas sales volumes, Kotak sees a rise in these parameters.

The company will detail its March quarter earnings Wednesday. After the results, investors and analysts will monitor the progress of the capacity expansion of the Numaligarh Refinery, according to Motilal Oswal. "An increase in production at the Baghjan field is a key factor to be monitored for the medium term," the brokerage said.

At 1453 IST, shares of Oil India were trading slightly higher at INR 423.45 on the National Stock Exchange. Since reporting its December quarter earnings on Feb. 7, the company has seen its share price rise about 1%.

Of the 10 brokerage reports on the company available with Informist, nine have a 'buy' rating on the stock, while one has a 'hold' rating. The average target price of the brokerages with the 'buy' rating is INR 637.

Following are the Jan-Mar earnings estimates for Oil India in INR million, based on reports from eight brokerages in descending order of net profit:

End

US$1 = INR 85.60

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Nishant Maher

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