Oil India Ltd (Q4 FY12)
India Infoline News Service | Mumbai |
Oil India Ltd (OINL) reported a 14% yoy fall in net sales. Net sales were lower owing to 26.4% decline in net crude oil realizations.
CMP Rs450, Target Rs520, Upside 15.6%
Source: Company, India Infoline Research
Valuation summary
- Oil India Ltd (OINL) reported a 14% yoy fall in net sales. Net sales were lower owing to 26.4% decline in net crude oil realizations. During the quarter, OINL’s subsidy burden was at Rs28.7bn or US$80.8/bbl. This was in comparison to US$51.1/bbl in Q4 FY11 and US$53.1/bbl in Q3 FY12.
- Crude oil sales volumes were higher by 1.8% yoy and 2.1% on a sequential basis. Gas sales volumes were higher by 7.1% on a yoy basis but declined 8.5% on a qoq basis. Total oil + OEG volumes were higher by 3.5% on yoy basis but lower by 1.7% qoq.
- OINL reported an OPM of 31.3% as compared to 44.7% in Q4 FY11 and 55.1% in Q3 FY12. The fall was mainly on account of the sharp jump in subsidy burden and increase in staff costs.
- Decline of 16.7% yoy in depreciation and depletion expenses along with higher other income results in a PBT decline of 26% yoy as compared to 39.7% yoy fall in operating profit. Decline in depreciation was on account of lower impact on fixed assets, which was offset by higher depletion and dry well expenses. Higher other income was on account of better dividend income and higher yields on increased cash balances.
- We maintain our BUY rating on the stock considering a steep discount to global peers on EV/BoE basis.
| (Rs mn) | Q4 FY12 | Q4 FY11 | % yoy | Q3 FY12 | % qoq |
| Net sales | 18,021 | 20,967 | (14.0) | 25,898 | (30.4) |
| Material costs | (119) | (449) | (73.6) | (376) | (68.4) |
| Personnel costs | (3,577) | (2,342) | 52.7 | (2,611) | 37.0 |
| Stautory levies | (5,189) | (6,083) | (14.7) | (7,172) | (27.7) |
| Other overheads | (3,490) | (2,721) | 28.3 | (1,457) | 139.5 |
| Operating profit | 5,647 | 9,372 | (39.7) | 14,282 | (60.5) |
| OPM (%) | 31.3 | 44.7 | (1,336) bps | 55.1 | (2,381) bps |
| Depreciation | (2,841) | (3,413) | (16.7) | (2,887) | (1.6) |
| Interest | (1) | (112) | (99.0) | (11) | (90.1) |
| Other income | 3,389 | 2,521 | 34.4 | 3,756 | (9.8) |
| PBT | 6,194 | 8,368 | (26.0) | 15,140 | (59.1) |
| Tax | (1,746) | (2,742) | (36.4) | (5,000) | (65.1) |
| Effective tax rate (%) | 28.2 | 32.8 | 33.0 | ||
| PAT | 4,448 | 5,626 | (20.9) | 10,140 | (56.1) |
| PAT margin (%) | 24.7 | 26.8 | (215) bps | 39.2 | (1,447) bps |
| Ann. EPS (Rs) | 29.6 | 37.4 | (20.9) | 67.5 | (56.1) |
Valuation summary
| Y/e 31 Mar (Rs m) | FY11 | FY12E | FY13E | FY14E |
| Revenues | 83,206 | 98,632 | 98,440 | 104,323 |
| yoy growth (%) | 5.3 | 18.5 | (0.2) | 6.0 |
| Operating profit | 42,721 | 46,747 | 47,704 | 51,033 |
| OPM (%) | 51.3 | 47.4 | 48.5 | 48.9 |
| Pre-exceptional PAT | 28,877 | 34,469 | 34,512 | 36,525 |
| yoy growth (%) | 10.6 | 19.4 | 0.1 | 5.8 |
| EPS (Rs) | 48.0 | 57.3 | 57.4 | 60.8 |
| P/E (x) | 9.4 | 7.8 | 7.8 | 7.4 |
| Price/Book (x) | 1.7 | 1.4 | 1.4 | 1.3 |
| EV/EBITDA (x) | 3.8 | 3.0 | 3.0 | 2.5 |
| Debt/Equity (x) | 0.1 | 0.1 | 0.0
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