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PSU stock: Oil India shares surge 15% to hit record high, up 50% in 2024; further upside likely

PSU stock: Oil India shares surge 15% to hit record high, up 50% in 2024; further upside likely

Oil India share price target: Emkay Global said it has upped its target price for Oil India by 50 per cent to Rs 670 per share as its earlier estimates and valuations were built on conservative assumptions

Amit Mudgill
Amit Mudgill
  • Updated Feb 15, 2024 12:04 PM IST
PSU stock: Oil India shares surge 15% to hit record high, up 50% in 2024; further upside likelyOil India forecast: Motilal Oswal Securities said it has raised its earnings per share estimate by 8 per cent for FY24 and increased its revenue, Ebitda and EPS estimates for FY25 by 4-13 per cent and FY26 by 5-14 per cent

Oil India Ltd shares hit record high level in Thursday's trade, with a couple of brokerages maintaining positive outlook on the PSU stock that has climbed 50 per cent in 2024 so far, and about 129 per cent in the last one year. The stock hit an all-time high of Rs 575.45 on BSE and was up 15.33 per cent for the day. Analysts have price targets in the range of Rs 560-670 on the stock.

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Emkay Global said it has upped its target price for Oil India by 50 per cent to Rs 670 per share as its earlier estimates and valuations were built on conservative assumptions, but the company has been reiterating, and delivering on its growth targets.

"NRL’s performance is also better, with operating leverage from high utilization, stable debt trajectory, and broader macros supportive with other standalone refining peers enjoying better valuations. Post steady Q3FY24 consol. results, we raise Oil India's FY24E-26E EPS by 18-19 per cent, while raising our medium term upstream estimates, thereby boosting SA DCF value by Rs100 per share," it said. Emkay said while it has moved to a more realistic scenario, material upside risk exist on volume & gas pricing front.

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Motilal Oswal Securities said it has raised its earnings per share estimate by 8 per cent for FY24 and increased its revenue, Ebitda and EPS estimates for FY25 by 4-13 per cent and FY26 by 5-14 per cent, fuelled by the strong outlook for oil & gas production.

"The stock currently trades at a P/E multiple of 7.2 times FY25E EPS and 5.5 times FY25E EV/Ebitda. We value the stock at 7 times December 2025 standalone adj. EPS and add investments to arrive at our target of Rs 650," it said.

YES Securities said Oil India’s Q3 earnings were lower than expected in terms of Ebitda and PAT due to higher other expenses and a reduced crude realisation. That said, other income surged 397 per cent YoY, resulting from interest/dividend income from investments.

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"We upward revise our volume estimates for FY25 and FY26 and maintain an ADD rating on Oil India, revising our target to Rs 563 per share, and find decent upside on current market price," it said.

 

Also read: Vedanta shares tank 9% on block deal report; Rajiv Jain's GQG likely buyer

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
Published on: Feb 15, 2024 12:04 PM IST
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