Oil India shares gained significant traction after JM Financial retained its 'Buy' rating and raised the target price to ₹620 from ₹585, implying a potential upside of 22.3%. According to reports from The Financial Express, the brokerage revised its earnings estimates upward after the state-run oil explorer posted a stronger-than-expected March quarter performance. The company's standalone profit after tax for the March quarter came in at ₹1,789.5 crore, sharply ahead of JM Financial's estimate of ₹1,120 crore and consensus expectations of around ₹1,170 crore.
Oil India's crude production during the March quarter rose 5.6% year-on-year and 3.8% sequentially to 0.891 million metric tonnes, while crude sales volumes increased 6.5% quarter-on-quarter to 0.87 million metric tonnes. As reported by The Financial Express, the brokerage expects Oil India's production profile to remain healthy over the medium term, with cumulative output growth potentially reaching nearly 20% between FY27 and FY29. The Numaligarh Refinery, where Oil India owns a 69.73% stake, showed strong performance with gross refining margins improving to $21.2 per barrel during the quarter against $16.3 per barrel in the December quarter.
JM Financial estimates Oil India's adjusted net profit at ₹9,673.8 crore in FY27 and ₹12,456.3 crore in FY28, with earnings per share projected at ₹59.5 for FY27 and ₹76.6 for FY28. According to the brokerage's analysis reported by The Financial Express, Oil India continues to trade at reasonable valuations despite the recent rally, trading at 6.6 times FY28 estimated earnings and 1.1 times FY28 estimated book value. The valuation framework assigns ₹375 per share to Oil India's standalone business, ₹195 per share to its Numaligarh Refinery stake, and ₹50 per share to its investment in Indian Oil Corporation.
JM Financial expects Oil India's earnings trajectory to remain strong over the next few years as crude output rises and the Numaligarh refinery expansion starts contributing meaningfully. As reported by The Financial Express, the brokerage expects Oil India's earnings to expand at a robust 14-18% CAGR over the next three-five years. The ongoing expansion of Numaligarh Refinery from 3 million metric tonnes per annum to 9 million metric tonnes per annum by the end of FY27 is expected to become a major earnings driver for Oil India. The brokerage also raised FY27 and FY28 earnings estimates by 8% to 12% after factoring in the recent reduction in royalty rates for onshore crude fields.
