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Informist, Monday, Feb. 9, 2026

 

By Pallavi Singhal

 

NEW DELHI – State-owned Oil India Ltd. is expected to report a sharp decline in its bottom line for the December quarter largely due to a steep year-on-year fall in crude oil realisation, according to brokerages. The company's revenue is also likely to decline, though the drop is expected to be modest as stable production levels and a marginal improvement in gas pricing partly offset lower crude prices, they said.

 

The upstream producer's net profit for the quarter is expected to fall 28% on year to INR 8.84 billion, according to the average of estimates from eight brokerages. The profit is seen falling nearly 15% sequentially. The lowest estimate for the company's net profit is INR 3.89 billion by Elara Securities (India) Pvt. Ltd., which factors in sharply lower oil realisations and higher exploration expenses. The highest estimate is INR 12.44 billion by Kotak Securities Ltd., supported by expectations of stable production, lower provisioning, and currency-related benefits.

 

The company's revenue for the quarter is expected to decline around 2% on year and nearly 6% sequentially to INR 51.47 billion. Motilal Oswal Financial Services has the lowest revenue estimate of INR 50.30 billion. Elara Securities has the highest estimate at INR 53.53 billion, factoring in stable volumes and higher gas sales contributions.

 

Crude oil realisations remain the key drag on the company's earnings, according to analysts. Analysts estimate Oil India's net crude realisation to fall by around $10 per barrel on year, tracking the broader decline in global oil prices. Brent crude averaged $63.7 per barrel in the December quarter, down $10 a barrel on year and $5 sequentially. Brokerages peg Oil India's oil realisation at $61–64 per barrel, compared to $73.8 per barrel in the year-ago quarter.

 

The decline in crude oil realisations was partly cushioned by a weaker rupee during the quarter, Kotak Securities said. The rupee depreciated around 3–4% on year against the dollar in the December quarter, which helped support rupee-denominated realisations, Kotak Securities said. However, the currency benefit was insufficient to offset the fall in crude prices, given the larger decline in crude oil prices and oil's dominant contribution to Oil India's standalone earnings, the brokerage said.

 

Oil India sells most of its crude and gas domestically, largely to Indian refiners. The price at which it sells crude oil is benchmarked to global crude prices, which are quoted in US dollars. As a result, even domestic sales are effectively dollar-linked. Crude oil accounted for nearly 65% of Oil India's standalone revenue and close to 60% of profit before tax, according to the company's September quarter results.

 

Crude oil production during the quarter is expected to remain largely flat on year, with some brokerages pencilling in a marginal sequential improvement. ICICI Securities expects crude oil output to remain flat on year at 860,000 tonnes, up over 1% sequentially from 850,000 tonnes in the preceding quarter. YES Securities has forecast a higher 3.4% on-year decline in crude oil production.

 

Gas production is expected to decline slightly on year, but improve on a sequential basis. ICICI Securities expects gas output at 820 billion cubic metres, compared with 830 bcm in the year-ago quarter. Natural gas accounts for about a quarter of the company's revenue and roughly one-fifth of its profit before tax.

 

Analysts expect gas realisations to provide some support to earnings, partly offsetting pressure from lower crude oil realisations. ICICI Securities estimates that gas prices rose to INR 22.2 per cubic metre in the December quarter, up 9% on year, supported by a higher mix of new well gas, which is priced at a premium to administered price mechanism gas. JM Financial, however, expects overall gas realisations to remain broadly flat on year, as it estimates the benefit from an improved gas mix will be largely offset by lower administered gas prices.

 

Oil India's earnings before interest, tax, depreciation, and amortisation are expected to fall about 27% year on year to INR 17.0 billion, according to consensus estimates. EBITDA estimates range from a low of INR 8.3 billion by Elara Securities to a high of INR 22.0 billion by Kotak Securities. 

 

Oil India is an upstream oil and gas producer which explores and produces crude oil and natural gas. Monday, shares of Oil India ended at INR 490.05 on the National Stock Exchange, down 1.5% from the previous close. Shares of the company have risen by more than 12% since it announced its September-quarter earnings. The company will disclose its December quarter earnings Tuesday.

 

Of the eight research reports on the company available with Informist, six have a 'buy' or equivalent recommendation, with an average target price of INR 515, which is over 5% higher than the current market price. The remaining two brokerages have a 'hold' recommendation on the stock.

 

The following are the December quarter earnings estimates for Oil India from eight brokerage firms in descending order of the estimate of net profit in INR billion:

 

Brokerage	Net sales	Net profit	EBITDA
Kotak Securities Ltd	51.20	12.44	22.00
Prabhudas Lilladher Pvt Ltd	50.80	10.20	15.90
YES Securities (India) Ltd	53.45	9.99	15.27
Motilal Oswal Financial Services Ltd	50.30	9.70	19.80
JM Financial Institutional Securities Pvt Ltd	51.13	9.48	20.23
ICICI Securities Ltd	50.50	8.40	19.700
Emkay Global Financial Services Ltd	50.86	6.65	15.03
Elara Securities (India) Pvt Ltd	53.53	3.89	8.26
Average	51.47	8.84	17.02

End

 

US$1 = INR 90.76

 

Edited by Saji George Titus

 

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