Oil India shares zoom 15% to new high on strong production outlook

Shares of Oil India surged 14 percent on February 15 to hit a new high of Rs 570.50 on the NSE in an otherwise volatile market on the back of robust production outlook.

The stock of state-run oil exploration and production company has surged around 18 percent after reporting its third quarter earnings on February 13.

Oil India reported a marginal increase in year-on-year in consolidated net profit to Rs 2,608 crore, while its revenue from operations came in at Rs 10,912.61 crore, up 3 percent. The company’s crude oil earnings before interest and tax (EBIT) in Q3 was Rs 1,430.38 crore, a decline of 7 percent YoY, and EBIT from the natural gas segment came in at Rs 726.69 crore, as against Rs 1,091.21 crore a year back.

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At 11:13am, the Oil India shares traded at Rs 567 on the NSE, up 13.6 percent from the previous close. The stock has zoomed over 100 percent in the last one year, doubling investors’ money. In comparison, the benchmark Nifty 50 rose 21 percent.

According to analysts at Motilal Oswal, Oil India’s production growth guidance remains robust, with drilling activity and development wells in old areas contributing to this growth. The company is also applying new technologies to grow production.

Capacity expansion for Numaligarh Refinery (NRL) would also be completed by September 2025, which would help in further upside, the brokerage said.

“Oil India remains a strong conviction with a 1.2x FY25E P/B (standalone) valuation. It is a unique play to benefit from the strong multi-year upcycle in both upstream and refining,” Motilal Oswal said in its report as it maintained a ‘buy’ rating with a target price of Rs 650.

Also Read | Oil India Q3 results: Net profit increases 3% to Rs 2,608 crore

From a technical view, according to ICICI Securities, buying demand emerging from 61.8 percent retracement of the previous up-move and 20-day EMA augurs well for the next leg of rally for Oil India.

The brokerage recommends investors to buy the stock in the Rs 487-497 range within 14 days for a target of Rs 535 with a stop loss of Rs 472 per share.

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