Oil India Ltd. expects its top line and bottom line to expand in the ongoing fiscal as crude volume is seen to remain steady and gas production is likely to rise.
"As far as Oil India's standalone results are concerned, the bottom line numbers will be absolutely similar to growth numbers what we are talking about Ebitda or the price realisation because we don't have any raw material cost," Harish Madhav, director finance at Oil India, told BQ Prime's Niraj Shah.
"So every incremental revenue contributes straight away to our profitability, except for the collection of the royalties or duties whatever we take," he said. But in case of the contribution from the Numaligarh refinery output, that depends on the GRM (gross refining margin)."
The oil explorer's revenue rose 36.5% over a year earlier to Rs 8,869.7 crore in the quarter ended March, beating the Bloomberg consensus analyst estimate of Rs 4,800.5 crore. Net profit was up 123% at Rs 2,117.7 crore, against the Rs 1,277.2-crore forecast.
Oil production was down 1% and gas 7% in the fourth quarter, but for the year, the output remained steady.
For FY23/24, crude oil volumes are likely to remain unchanged at 3.05-3.15 million tonnes per annum compared with 3.01 MTPA in FY22, according to Prabhudas Lilladher. Gas production volumes, however, are seen to increase to 8.8-9.2 mmscmd against 8.3 mmscmd in FY22, the brokerage said in a report.
"We are in the process of augmenting infrastructure for gas marketing and gas supplies," Madhav said, adding that the oil company is confident that it will meet analysts' estimates.
The company will increase its crude oil production by 15-20% in the next two to three years despite low discoveries he said. "We have augmented development in four-five identified fields."
Prabhudas Lilladher raised its FY23/24 estimates for Oil India by 21% and 26%, respectively, to factor in higher crude oil price ($85/75 a barrel vs $80/70 earlier) and LPG realisation ($700/600 a tonne versus $500 earlier).
Oil India's earnings, the brokerage said, will “ride on improving crude oil and gas realisation, along with expansion of Numaligarh refinery by 6 MTPA (3 MTPA capacity).
It maintained ‘buy' on the stock, but cut target price to Rs 344 apiece from Rs 360 based. The stock closed at Rs 239.80 on Tuesday.
“We cut our target multiple due to concerns of subsidy sharing given large marketing losses which should come off as global refiners come back from maintenance shutdown,” the report said.
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