Oil India (OINL IN) – Q4FY26 Result Update – Rev/EBITDA miss; lower royalty rates to boost earnings – Accumulate
Published on 14 May 2026
Crude oil production grew 3.8% QoQ to 0.9mmt, while gas production declined 5.9% QoQ to 0.8bcm. Oil price realization improved QoQ to USD77.9/bbl vs. USD62.8/bbl amid West Asia disruption. EBITDA stood at Rs18.2bn, missing est. (PLe Rs21.6bn, BBGe Rs20.0bn, +60.6% YoY, +39.1% QoQ) due to increase in other expenses which included inc forex loss of Rs4.9bn and a write off of Rs2.2bn, higher levies and contract costs. However, PAT stood at Rs17.9bn, beating est. due to high other income (PLe Rs16.5bn, BBGe Rs11.7bn, +12.5% YoY, +121.4% QoQ). Recent revision of royalty rates from 16.7% to 10% by MoPNG is positive for the upstream sector. We continue to remain conservative and build in oil/gas volume of 3.6mmt/3.3bcm (previous: 3.6mmt/3.4bcm) in FY27E and 3.7mmt/3.4bcm (previous: 3.8mmt/3.6bcm) in FY28E, reflecting lower-than-expected production trends. The revision in FY27 estimates reflects higher crude realization assumptions, which outweigh the impact of lower production estimates. Valuing the standalone business at 10x FY28E Adj EPS and adding the value of investment in NRL, we arrive at TP of Rs550 (earlier: Rs511) and maintain the rating at ‘Accumulate.
