HDFC Securities highlights that while near-term earnings face headwinds from refinery delays and softer crude prices, strong capital structure and steady production growth underpin Oil India's long-term prospects.
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HDFC Securities Institutional Equities
HDFC Securities has reiterated its 'Buy' rating on Oil India Ltd. with a revised target price of Rs 495 per share, down from Rs 508 earlier, following delays in the commissioning of Numaligarh Refinery Ltd.'s capacity expansion.
The brokerage expects operations to commence in Q4 FY26, pushing back earlier assumptions of phased commissioning from December 2025 and believes Oil India's standalone gas and oil production to grow at 9% and 4% CAGR over FY25-27E respectively.
Refinery expansion delay and impact on estimates
NRL, a material subsidiary of Oil India, is expanding its refinery capacity from 3 million metric tonnes per annum to 9MMTPA. The delay in commissioning has led HDFC Securities to trim FY26/27 EPS estimates by 1.6% and 9.1%, respectively.
Despite this, the brokerage remains optimistic about Oil India's core business, projecting 9% CAGR in gas production and 4% CAGR in oil output over FY25–27E.
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