ICICI Securities has raised the target price of Oil India Ltd. to ₹600 from ₹545, implying a potential upside of 28% from the current market price of ₹468. According to reports from NDTV Profit, the brokerage has maintained its 'Buy' rating on the stock while raising FY27E/FY28E earnings per share by 4%/7% and introducing FY29E EPS of ₹79.2. The stock has outperformed the broader market in the last six and 12 months, with the brokerage expecting this momentum to sustain as delivery of expansion plans at both upstream and downstream segments comes to fruition over FY27–29E.
Oil India continues to build momentum across both core upstream and downstream segments, with oil production on track to reach its target of ~4mt in FY27 itself, with the level likely sustaining through FY28–29E. As reported by Moneycontrol, gas output is set to show a step change in output and pricing, with incremental volumes eligible for New Well price, post the commissioning of the NRL expansion (end-FY27E), full connectivity of IGGL and linkage with DNPL (FY28E). The Phase-1 of the NRL expansion is tracking favourably – likely completion by endCY26, with petrochemical operations expected to come up over FY28E.
At revised estimates factoring in stronger production and revisions to gas realisation estimates, EPS CAGR over FY26–29E is a robust 25%, with steady expansion in return ratios and free cash flow. As reported by NDTV Profit, the dividend yield of ~4% is an additional bonus for investors. The valuations of ~6x FY29E EPS and ~4x EV/EBITDA offer material upside potential for the stock.
According to the brokerage report, key upside risks include stronger oil prices, higher gas production, stronger GRMs and higher petrochemical margins. However, key downside risks include execution delays for NRL, gas monetisation delays owing to infrastructure delays, and regulatory changes capping oil realisations. The company continues to build momentum across both core upstream and downstream segments, as highlighted by the brokerage.
