OiI India stock zooms 32% in seven sessions, is it a good time to buy?

Shares of Oil India hit a fresh 52-week high in an otherwise weak market today. The share of the state-owned firm rose 5.54 per cent intraday to Rs 294 against the previous close of Rs 278.55 on BSE.

Shares of Oil India have risen 32.13 percent in the last seven sessions on the back of strong Q4 earnings. The large-cap stock is trading higher than 5-day, 20-day, 50-day, 100-day and 200-day moving averages.

Oil India stock has gained 104.65 per cent in a year and risen 47.47 per cent since the beginning of this year. Total 5.92 lakh shares changed hands amounting to a turnover of Rs 16.83 crore on BSE.

Market cap of the firm rose to Rs 31,794 crore.

On May 27, Oil India reported its highest-ever quarterly net profit in Q4 as it got nearly $100 per barrel price for oil produced and sold. Net profit at Rs 1,630.01 crore in the January-March quarter was almost double of Rs 847.56 crore profit in the same period of last year, OIL Director (Finance) Harish Madhav said. This is because the firm got $98.08 for every barrel of crude oil produced and sold in the fourth quarter of fiscal 2022, as compared to $59.80 a barrel realisation a year back.

Brokerages turned bullish on the firm post its Q4 earnings.

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Post the analyst meet of Oil India, Prabhudas Lilladher gave a buy call on the stock with a target price of Rs 344.

"Management guided strong volume growth FY25E to be a watershed year, driven by commissioning of major oil and gas expansion along with Numaligarh Refinery's (NRL) expansion projects. Some key highlights are 1) Oil and gas production to increase by 30 per cent and 70 per cent respectively post completion of major projects in Assam 2) NRL refinery's expansion to 9MTPA from current 3MTPA to come on stream by FY25E 3) No imposition of windfall taxes after two years of depressed profits and 4) No price cap on gas prices. OINL is well placed to benefit from rising oil and gas prices and high GRMs and FY25E EBIDTA can increase to Rs210bn (FY22-Rs105bn) on higher volumes," the brokerage said.

 Kotak Equities has upgraded Oil India stock to 'add' and raised its target price to Rs 285 translating into an upside of 2.5 percent from its June 6 close. The upgrade in the rating is driven by the change in the brokerage firm's assumption of crude oil prices in the current and next financial year. "We upgrade Oil India to add with a fair value of Rs 285 given elevated oil prices will sustain for longer, driven by unyielding geopolitical issues, a tight supply situation, and declining global inventories," the brokerage firm said in a note.

On June 6, Emkay Global gave a buy call on the stock with a target price of Rs 305. "We lower our FY23E/24E earnings per share by 13 per cent/14per cent, factoring in higher operating expenditure and revenue realignment. Accordingly, we lower our DCF-SOTP based target price by 9 per cent to Rs 305, factoring in lower dividends from NRL due to capex. Retain Buy rating," the brokerage said.

After the earnings, Motilal Oswal maintained its buy rating on the stock.

"We factor in a gas price of $7.3/$5.5/mmBtu for FY23/FY24. The stock trades at a 34 per cent discount to its one-year forward long-term P/E average of 8x. We use a SoTP-based fair value of 7.1 times FY24E adjusted earnings per share of Rs 39.5 and add investments to arrive at our target price of  Rs 367 per share. We maintain our Buy rating," the financial services firm said.