Oil India (Q3 FY13)

India Infoline News Service | Mumbai |

We maintain our BUY rating on the stock considering a steep discount to global peers on EV/BoE basis.

CMP Rs538, Target Rs638, Upside 18.5%
  • OIL India (OINL) reported its net sales for the quarter at Rs25,168mn up 2% yoy. The sales were below our estimates mainly due to lower than expected crude oil and natural gas sales volumes.
  • Crude net realizations at US$52.6/bbl declined by 7.8% yoy in dollar terms, but 6.3% yoy depreciation in Rupee against the US dollar on a yoy basis helped offset the impact to some extent. The subsidy burden borne by OINL in the quarter was Rs19.5bn up 5.2% yoy and down 6.3% qoq. OINL’s contribution in the upstream share was at 12.9% as compared to 13.8% in Q2 FY13 and 12.1% in Q3 FY12.
  • Crude oil sales volumes declined by 2.7% yoy and 2% on qoq basis. Gas sales volumes also declined by 1.5% yoy and 2.2% on qoq basis. Total oil + OEG volumes declined by 2.3% on yoy basis and 2.1% on qoq basis.
  • OPM at 48.8% was 11ppts lower yoy and 141bps lower qoq.  The statutory levies were higher by 607bps yoy as a percentage of net sales owing to the higher cess burden (Rs4,500/tonne cess from Q1FY13 onwards). Personnel costs and overheads also rose as a percentage of net sales by 205bps and 236bps respectively. Depreciation charges were lower by 28.8% yoy on back of lower dry well expenditure (56.4% down yoy).
  • 8% increase in other income led by higher interest income restricted the fall in PAT to 7.4%.
  • We maintain our BUY rating on the stock considering a steep discount to global peers on EV/BoE basis.
Cost Analysis
As a % of net sales Q3 FY13 Q3 FY12 bps yoy Q2 FY13 bps qoq
Material costs 0.3 (0.0) 27 (0.6) 81
Personnel costs 12.6 10.6 205 12.3 36
Statutory levies 30.2 24.2 607 31.0 (77)
Other overheads 8.1 5.7 236 7.1 103
Total costs 51.2 40.4 1,076 49.8 141
Source: Company, India Infoline Research

Result table
(Rs mn) Q3 FY13 Q3 FY12 % yoy Q2 FY13 % qoq
Net sales 25,168 24,685 2.0 25,194 (0.1)
Material costs (63) 5 (1,364.0) 140 (145.2)
Personnel costs (3,179) (2,611) 21.8 (3,093) 2.8
Statutory levies (7,607) (5,962) 27.6 (7,810) (2.6)
Other overheads (2,039) (1,417) 43.9 (1,783) 14.4
Operating profit 12,280 14,700 (16.5) 12,649 (2.9)
OPM (%) 48.8 59.6 (1,076) bps 50.2 (141) bps
Depreciation (2,224) (3,125) (28.8) (2,560) (13.1)
Interest (1) (6) (78.3) (2) (18.8)
Other income 3,857 3,570 8.0 4,025 (4.2)
PBT 13,912 15,140 (8.1) 14,112 (1.4)
Tax (4,509) (5,000) (9.8) (4,567) (1.3)
Effective tax rate (%) 32.4 33.0
32.4
Adjusted PAT 9,403 10,140 (7.3) 9,546 (1.5)
Adj. PAT margin (%) 37.4 41.1 (372) bps 37.9 (53) bps
Reported PAT 9,403 10,140 (7.3) 9,546 (1.5)
Ann. EPS (Rs) 62.6 67.5 (7.3) 63.5 (1.5)
 Source: Company, India Infoline Research

Financial Summary
Y/e 31 Mar (Rs m) FY12 FY13E FY14E FY15E
Revenues 98,632 102,683 114,425 117,480
yoy growth (%) 18.5 4.1 11.4 2.7
Operating profit 46,735 49,970 56,407 56,456
OPM (%) 47.4 48.7 49.3 48.1
Pre-exceptional PAT 34,457 38,118 43,322 43,834
Reported PAT 34,457 38,118 43,322 43,834
yoy growth (%) 19.3 10.6 13.7 1.2





EPS (Rs) 57.3 63.4 72.1 72.9
P/E (x) 9.3 8.4 7.4 7.3
Price/Book (x) 1.8 1.6 1.4 1.3
EV/EBITDA (x) 4.5 3.6 2.9 2.6
RoE (%) 20.7 20.1 20.0 18.0
RoCE (%) 27.9 27.9 28.0 25.4
Source: Company, India Infoline Research

BSE 361.00 0.30 (0.08%)
NSE 361.00 0.20 (0.06%)

***Note: This is a NSE Chart

 

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