OIL - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 4.1

Oil India Ltd. (OIL) combines decent profitability, attractive valuation, and a well-rooted presence in India’s energy supply chain, though it faces typical sectoral headwinds and cyclical earnings volatility.

🔍 Core Financial Breakdown

ROE: 13.4% and ROCE: 13.0% — respectable capital efficiency; room for improvement but solid for a public sector energy firm.

EPS: ₹40.3 — solid earning capacity supports valuation strength.

Debt-to-equity: 0.62 — moderate leverage; manageable but needs watching if capex ramps up.

Quarterly PAT: ₹1,339 Cr. → ₹1,310 Cr. (down 2.2%) — relatively stable; not a major concern.

Dividend Yield: 2.38% — provides decent cash flows for income-seeking investors.

📊 Valuation Indicators

Metric Value Commentary

P/E Ratio 10.9 Below industry average (11.6); value zone

P/B Ratio ~1.44 Reasonable; suggests fair pricing against net assets

PEG Ratio 1.87 High — implies premium against expected growth

Intrinsic Value Estimated ₹460–₹480 Close to market price; mild undervaluation potential

🛢️ Business Model & Strategic Outlook

India’s second-largest national oil explorer after ONGC; operations in crude oil and natural gas across Northeast India, offshore, and international assets.

Benefits from domestic energy demand, strategic reserves management, and government infrastructure push.

Vulnerable to global crude price swings, regulatory constraints, and environmental transition risks.

Competitive edge: proven reserves, upstream infrastructure, and government support.

📉 Technical Readings

RSI: 48.5 — neutral; no immediate directional signal.

MACD: -0.84 — bearish crossover; trend weakening.

Price hovering around DMA 50 & 200 — consolidation zone.

Volume slightly below 1-week average — tempered market interest.

🎯 Entry Zone & Holding Strategy

Suggested Entry Zone: ₹420–₹435 — conservative buying zone for value and yield-seeking investors.

Long-Term Guidance

Suitable for portfolios needing defensive allocation with dividend cushion.

Attractive if you anticipate a rebound in energy prices or domestic exploration incentives.

Keep an eye on capex plans, crude price trends, ESG-related policy shifts, and earnings consistency.

Curious how Oil India stacks up against GAIL or Reliance in terms of valuation comfort, business resilience, and energy transition preparedness? I can sketch a comparison that brings hidden strengths to light. 🛢️⚡📊

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