Oil India (Q4 FY13)

India Infoline News Service | Mumbai |

OIL India (OINL) reported its net sales for the quarter at Rs24.7bn up 37.2% yoy. The sales were below our estimates mainly due to lower than expected crude oil and natural gas sales volumes.

CMP Rs579, Target Rs638, Upside 10.2%

  • OIL India (OINL) reported its net sales for the quarter at Rs24.7bn up 37.2% 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$55.4/bbl were higher 42.4% yoy and 5.4% qoq in dollar terms. Depreciation of rupee against the US$ (7.7% yoy) further helped the realizations on a yoy basis. Notably the net realizations looked higher on back of higher subsidy per bbl accounted in Q4 FY12. The subsidy burden borne by OINL in the quarter was Rs18.5bn down 35.6% yoy. OINL’s contribution in the upstream share was at 12.5% as compared to 15.9% in Q4 FY12 and 12.9% in Q3 FY13. For the full year the subsidy burden on OINL increased by 7.4% to Rs78.9bn. OINL’s contribution in the upstream share was 13.2% vis-à-vis 13.4% in FY12. 

  • Crude oil sales volumes declined by 9.3% yoy and 4.8% on qoq basis. Gas sales volumes improved by 2.6% yoy but declined 4.7% qoq. Total oil + OEG volumes declined by 5.2% on yoy basis and 4.7% on qoq basis.

  • OPM for the quarter came in at 39.5% as compared to 26.2% in Q4 FY12. The yoy surge was on account of abnormally high subsidy burden in Q4 FY12 resulting in lower revenues. Statutory levies were higher by 80bps yoy as a percentage of net sales owing to the higher cess burden (Rs4,500/tonne cess from Q1FY13 onwards). Depreciation charges were higher by 27.3% yoy on back of higher depletion and dry well expenditure. This was partially offset by 9.9% increase in other income led by higher interest income.

  • 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 Q4 FY13 Q4 FY12 bps yoy Q3 FY13 bps qoq
Material costs (0.9) 0.7 (157) 0.3 (117)
Personnel costs 14.8 19.8 (499) 12.4 245
Statutory levies 29.6 28.8 80 30.2 (63)
Other overheads 17.0 24.6 (757) 8.1 889
Total costs 60.5 73.8 (1,333) 51.0 954
Source: Company, India Infoline Research

Result table
(Rs mn) Q4 FY13 Q4 FY12 % yoy Q3 FY13 % qoq
Net sales 24,718 18,021 37.2 25,168 (1.8)
Material costs 226 (119) (290.6) (63) (457.6)
Personnel costs (3,670) (3,574) 2.7 (3,121) 17.6
Statutory levies (7,315) (5,189) 41.0 (7,607) (3.8)
Other overheads (4,199) (4,427) (5.1) (2,039) 105.9
Operating profit 9,759 4,713 107.1 12,339 (20.9)
OPM (%) 39.5 26.2 1,333 bps 49.0 (954) bps
Depreciation (2,394) (1,881) 27.3 (2,224) 7.7
Interest (20) (1) 1,718.2 (1) 1,438.5
Other income 3,694 3,362 9.9 3,798 (2.7)
PBT 11,040 6,194 78.2 13,912 (20.6)
Tax (3,394) (1,746) 94.4 (4,509) (24.7)
Effective tax rate (%) 30.7 28.2   32.4  
Adjusted PAT 7,646 4,448 71.9 9,403 (18.7)
Adj. PAT margin (%) 30.9 24.7 625 bps 37.4 (643) bps
Reported PAT 7,646 4,448 71.9 9,403 (18.7)
Ann. EPS (Rs) 50.9 29.6 71.9 62.6 (18.7)
Source: Company, India Infoline Research

Financial Summary
Y/e 31 Mar (Rs m) FY12 FY13 FY14E FY15E
Revenues 98,632 99,476 1,20,453 1,42,537
yoy growth (%) 18.5 0.9 21.1 18.3
Operating profit 46,735
BSE 354.70 0.50 (0.14%)
NSE 355.60 1.85 (0.52%)

***Note: This is a NSE Chart

 

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