Oil India (OINL IN) – Q3FY26 Result Update – Cutting production forecasts – Downgrade to ‘Accumulate’
Published on 11 Feb 2026
We revise our rating to ’Accumulate’ led by expected delay in achieving the production guidance of 4mmt for oil and 5bcm for gas. In Q3FY26, crude oil production grew 1.2% QoQ to 0.9mmt, while gas production remained flat QoQ at 0.8bcm. Oil price realization fell QoQ to USD62.8/bbl vs. USD68.2/bbl. Other expenses increased to Rs19bn from Rs12.9bn YoY led by Rs5bn of one-off items. Consequently, EBITDA declined to Rs13.1bn (-38.7% YoY, -1.2% QoQ; PLe: Rs15.9bn; BBGe: Rs17.0bn), while PAT came in at Rs8.1bn (-33.8% YoY, -22.6% QoQ; PLe: Rs10.2bn; BBGe: Rs9.0bn). The company expects to drill ~75 wells in FY26 and ~100 wells in FY27. The management expects FY26 production to surpass FY25 levels. For FY27/28, the management has guided oil production at 3.8mmt/4.0mmt; however, we remain conservative. We build in oil/gas volume of 3.6mmt/3.4bcm in FY27E and 3.8mmt/3.6bcm in FY28E. Valuing the standalone business at 11x Dec’27E adj EPS and adding the value of investment in NRL, we arrive at TP of Rs527 (earlier: Rs538) and revise the rating to ‘Accumulate’ from ‘BUY’.
