Analysts remain bullish on prospects of the company due to increase in crude price realisation and improvement in domestic gas price realisation.
Oil India (OIL) shares rose 5% to Rs 250 on the BSE on Wednesday, putting the company's three-day gain at 15%. The increase comes after the company announced good profitability in the March 2022 quarter (Q4FY22), with a 74% increase in turnover and a 92% increase in profit after tax (PAT).
On October 1, 2021, the stock of the state-owned oil exploration and production business reached a 52-week high of Rs 267.70.
Meanwhile, in Q4FY22, the business announced its highest-ever quarterly net profit of Rs 1,630 crore, thanks to oil prices of nearly $100 per barrel - both produced and sold. Compared to the same period last year, the net profit nearly doubled to Rs 847.56 crore.
In Assam, OIL has become the first firm in the country to commission a 100-kilowatt (KW) pilot plant to manufacture green hydrogen. The facility uses Anion Exchange Membrane (AEM) technology to produce green hydrogen with a purity of 99.99 percent. Aside from that, the company has formed partnerships with start-ups to build green hydrogen utilities.
"In the state of Assam, four important infrastructure projects were also commissioned during 2021-22, which will further strengthen the company's oil and gas production capacity," the management added.
Apart from that, analysts at HDFC Securities believe the stock is a good 'buy' following a rise in crude price realization and a rise in domestic gas prices.
"Given the predicted global economic rebound after Covid-19, oil price realization for FY22 improved to USD 76.7/bbl vs USD 43/bbl in FY21." EBITDA (earnings before interest, taxes, depreciation, and amortization) was 1% higher than predicted at Rs 2,000 crore, thanks to lower staff costs and other expenses. Meanwhile, "because to lower depreciation, higher other income, and a lower tax rate of 20%, the reported PAT came in 29% above the expectation," the brokerage company stated, setting a target price of Rs 300 on the stock.