Oil India is a 65-year-old Maharatna giant in oil and gas sector. In the trading week of November 4-8, Oil India stock price zoomed by a whopping 9.4% on BSE. There is room for more upside in Oil India stock as Motilal Oswal has recommended BUY with target price of Rs 660. Motilal's bullish tone in Oil India comes despite the company missed estimates in Q2FY25 earnings. However, Motilal believes the stock remains attractively priced after the recent correction.
Oil India Share Price:
Last week, on Friday, the stock price ended at Rs 508.20 apiece, down by 2.9% on BSE, with a market cap of Rs 82,664.21 crore. Despite the latest drop in stock, Oil India ended the trading week on a strong note with gains of a whopping 9.44%. YTD, the stock has rallied by a whopping 101.51%, making it a multi-bagger.
Oil India Dividend:
In its board meeting last week, Oil India approved an interim dividend of Rs. 3l- per share (30% of paid-up capital) for the financial year 2024-25. The interim dividend declared shall be paid on or before 04th December 2024.
To determine eligible shareholders, the company fixed Friday, 15th November, 2024 as the Record Date.
The upcoming dividend payout comes after Oil India paid up to 110% dividend in 2024, which was part of the FY24 fiscal. That being said, the upcoming Rs 3 per share dividend is interim and of FY25.
For FY24, the company delivered up to 145% dividend worth Rs 14.5 per share. Of the total, two interim dividends and one final dividend. And majority of it was delivered in 2024. The first interim dividend was of 35% worth Rs 3.50 per share for which Oil India turned ex-dividend on November 22, 2023. This followed another interim dividend of 85% valuing to Rs 8.50 per share and the ex-date was on March 18, 2024. The final dividend payout was of 25% worth Rs 2.50 per share and the ex-date for this was August 30, 2024.
Also, in 2024, Oil India rewarded investors with bonus issues in the ratio of 1:2. Meaning, the company delivered 1 free share on existing two equity shares. The ex-date was on July 2, 2024.
Motilal Oswal On Oil India:
In its latest note, Motilal Oswal said, "Oil India's 2QFY25 financial result was a miss at the EBITDA level and following the conference call, we cut our FY25/26 PAT by 2/5%, mainly as we moderate our volume growth assumptions. The core story still largely remains intact - Numaligarh Refinery Limited (NRL)'s expanded capacity is on track for commissioning in FY26 and Indradhanush Gas Grid phase I has already achieved mechanical completion."
Despite a marginal cut to the company's PAT estimates by Motilal Oswal, it is said that Oil India remains attractively priced after the recent correction, and the brokerage estimates the standalone business (adjusted for value of investments and NRL stake) is trading at FY26 PE of 5.8x.
Further, Motilal said that production growth guidance remained robust, with drilling activity and development wells in old areas contributing to this growth. OINL is also implementing new technologies to increase production. Capacity expansion for NRL (from 3mmt to 9mmt) is also expected to be completed by Dec'25, which will drive further growth.
On the valuation, it added, "We arrive at our TP of INR660/share as we build in the oil and gas production of 3.7mmt and 3.5bcm in FY26, respectively. We value the standalone business at 9x Dec'26E P/E, existing NRL stake at 3.0x FY24 P/B, and include the value of equity invested to date in NRL capacity expansion. Reiterate BUY."
Oil India Limited (OIL), a Maharatna CPSE of the Government of India, is a fully integrated Energy Company.
Also, on November 7, Oil India was selected as the preferred bidder for the Phop Graphite and Vanadium Block in Arunachal Pradesh. This selection was made by the Ministry of Mines in a recently concluded auction of eight critical mineral blocks, held under Tranche IV of the Auction of Critical and Strategic Mineral Blocks. The critical minerals, essential for high-tech and green energy applications, will play a crucial role in reducing India's dependence on imports.
Aligned with the national priorities of creating the national critical mineral mission, OIL is committed to support India's energy self-sufficiency and advancing the Govt. of India's vision of achieving self-reliance in critical minerals, positioning India as a competitive player in the global mineral economy, as per the filing.
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