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OIL INDIA LTD Target Price Rs 465 FUNDAMENTAL

BUY 533106 STOCK
Value Parameters OIL
BSE Code 1961. In 1981, Oil India became a wholly-owned
NSE Symbol Rs 415 Government of India enterprise.
CMP (As on 30th Nov, 2016) Rs 10
Face Value 446/300 Oil India Ltd is engaged in the business of
52 Week High/Low 25,208 exploration, development and production of crude
Market Cap (Rs cr) oil and natural gas, transportation of crude oil and
EPS (Rs) (FY16) 33.3 production of LPG. Oil India also provides various
TTM PE ratio (x) 12.5 E&P related services.

Shareholding Pattern % (Sep’ 16) Oil India Ltd owns and operates approximately 10
drilling rigs and over 10 work-over rigs, besides
Company Overview charter hiring drilling rigs based on operational
requirement. The Company is involved in crude
Oil India was incorporated as a private limited company on oil transportation in Southeast Asia, and owns
February 18, 1959 under the name 'Oil India Private Limited', and operates approximately 1,430 kilometers
pursuant to promoters' agreement dated January 14, 1958, of cross-country crude oil pipelines. It owns
between the President of India, Burmah Oil Company Ltd approximately 10 crude oil pumping stations and
and Assam Oil Company Ltd. The Company became a over 20 repeater stations spread across the eastern
deemed public limited company with effect from March 28, India states of Assam, West Bengal and Bihar. The
Company produces approximately five million
metric standard cubic meter per day (MMSCUMD)
of natural gas and has a pipeline network for
collection and supply of gas as fuel and feedstock
to various industries, such as refineries, fertilizer
and petrochemical plants, and power generation
plants.

Investment Rationale

§ Recent stakes in two Russian assets – Vankor and
Taas Yuryakh would help increase both oil and
gas production, mainly from Vankor.

§ Higher volume sparks light; the company
reported significant uptick in gas volume rising
by 9% YoY to 6.14 mmscm for Q2FY17.

§ Regular hike in Kerosene prices shall provide
cushion in the rising crude oil price scenario.

Concern

§ Diesel deregulation and shift of LPG to Direct
Benefit Transfer LPG has resulted in earnings
to directly correlate with brent crude making it
sensitive on crude price.

Valuations

At CMP of Rs 415 per share the stock trades at
trailing P/E multiple of 12.5 (x). The company has a
dividend yield of 3.8% and we have “BUY” rating
on the stock with a fair value of Rs 465 per share.

5 ARIHANT CAPITAL ¡ DECEMBER 2016