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OIL - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.8
| Stock Code | OIL | Market Cap | 81,671 Cr. | Current Price | 502 ₹ | High / Low | 522 ₹ |
| Stock P/E | 17.5 | Book Value | 298 ₹ | Dividend Yield | 2.29 % | ROCE | 15.2 % |
| ROE | 13.5 % | Face Value | 10.0 ₹ | DMA 50 | 435 ₹ | DMA 200 | 427 ₹ |
| Chg in FII Hold | -0.02 % | Chg in DII Hold | 0.23 % | PAT Qtr | 1,044 Cr. | PAT Prev Qtr | 813 Cr. |
| RSI | 71.1 | MACD | 20.7 | Volume | 46,74,591 | Avg Vol 1Wk | 1,48,78,912 |
| Low price | 322 ₹ | High price | 522 ₹ | PEG Ratio | 1.09 | Debt to equity | 0.28 |
| 52w Index | 89.7 % | Qtr Profit Var | -43.1 % | EPS | 28.7 ₹ | Industry PE | 19.0 |
📊 Core Financials
- Revenue & Profitability: Quarterly PAT at ₹1,044 Cr. vs. ₹813 Cr. previously, but YoY profit variation shows -43.1% decline, highlighting volatility.
- Return Metrics: ROE at 13.5% and ROCE at 15.2% indicate efficient capital utilization.
- Debt Position: Debt-to-equity ratio at 0.28 reflects moderate leverage, manageable within industry norms.
- Cash Flow: Dividend yield of 2.29% provides steady shareholder returns.
💹 Valuation Indicators
- P/E Ratio: 17.5, slightly below industry average of 19.0, suggesting fair valuation.
- P/B Ratio: Current Price ₹502 vs. Book Value ₹298 → ~1.68, trading at a premium to book value.
- PEG Ratio: 1.09, reasonable, reflecting growth-adjusted valuation alignment.
- Intrinsic Value: Strong fundamentals justify current valuation, though upside may be limited near 52-week high.
🏭 Business Model & Competitive Advantage
- Oil India Ltd. is a major upstream oil & gas producer with government backing and strategic importance.
- Competitive advantage lies in reserves, scale, and policy support, though earnings remain sensitive to global crude price fluctuations.
- Strong operational base with consistent dividend payouts enhances investor confidence.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive accumulation range between ₹440–480, closer to DMA levels, offering better risk-reward than current highs.
- Long-Term Holding: Suitable for investors seeking exposure to energy sector with moderate dividends; long-term returns tied to crude cycle and policy environment.
Positive
- Healthy ROE (13.5%) and ROCE (15.2%).
- Dividend yield at 2.29% provides consistent returns.
- Stock trading above DMA 50 (₹435) and DMA 200 (₹427), showing strong technical support.
- DII holdings increased (+0.23%), reflecting domestic institutional confidence.
Limitation
- Quarterly profit variation shows -43.1% decline, reflecting earnings volatility.
- P/B ratio at 1.68 suggests premium valuation.
- RSI at 71.1 indicates overbought conditions, limiting near-term upside.
Company Negative News
- FII holdings slightly reduced (-0.02%), showing marginal decline in foreign investor sentiment.
- High RSI signals potential short-term correction risk.
Company Positive News
- Quarterly PAT improved sequentially from ₹813 Cr. to ₹1,044 Cr.
- Strong dividend yield supports investor confidence.
- MACD positive (20.7), indicating bullish momentum.
Industry
- Oil & Gas industry P/E at 19.0, slightly higher than OIL’s 17.5, suggesting fair valuation.
- Sector outlook tied to global crude prices, energy demand, and government energy policies.
Conclusion
- Oil India Ltd. offers strong fundamentals, efficient returns, and steady dividends.
- Despite earnings volatility and premium valuation, its strategic importance and sector positioning make it a solid long-term hold.
- Accumulation near ₹440–480 is recommended for better risk-adjusted entry, with potential for stable returns over time.
I can also prepare a side-by-side comparison with ONGC so you can see how OIL stacks up against its closest peer in terms of valuation, profitability, and dividend yield. Would you like me to do that?