Oil India (OINL IN) – Q2FY26 Result Update – Production growth remains a key catalyst – BUY
Published on 17 Nov 2025
Reported oil production volume remained flat QoQ at 0.8mmt while gas production volume declined 2.8% QoQ to 0.8bcm in Q2FY26 due to an ethnic group protest that led to a production halt in eastern part. Volume impact was lower than anticipated, as per mgmt. Oil & gas price realization improved QoQ to USD68.2/bbl and USD6.8/mmbtu in Q2FY26 vs USD66.2/bbl & USD6.7/mmbtu in Q1FY26. Total other expenses increased to Rs23.0bn in Q2FY26 vs 16.9bn in Q1FY26 and Rs14.3bn in Q2FY25 due to a write-off of Rs7.2bn in Vijayapuram-2 well, Andaman in this quarter. This led to a decline in EBITDA to Rs13.2bn (Ple Rs19.3bn, BBGe Rs22.0bn, -39.3% YoY, -17.5% QoQ). PAT came in at Rs10.4bn (Ple Rs12.9bn, BBGe Rs15.4bn, -43.1% YoY, +28.3% QoQ. We remain conservative on production guidance and have slightly lowered FY26E volumes following lower production in Q2FY26. For FY27E and FY28E volume assumptions also remain conservative. We build in oil and gas volume of 3.5mmt and 3.4bcm for FY26E, compared to the guidance of 3.55mmt (Previous - 3.7mmt) and 3.6bcm. We continue to maintain the rating at ‘BUY’ driven by expected steady volume growth, valuing the standalone business at 9x FY27E/FY28E adj EPS and adding the value of investment in NRL to arrive at our TP of Rs532 (earlier: Rs525).
