OIL - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 3.8
| Stock Code | OIL | Market Cap | 79,069 Cr. | Current Price | 486 ₹ | High / Low | 522 ₹ |
| Stock P/E | 16.9 | Book Value | 298 ₹ | Dividend Yield | 2.36 % | ROCE | 15.2 % |
| ROE | 13.5 % | Face Value | 10.0 ₹ | DMA 50 | 439 ₹ | DMA 200 | 428 ₹ |
| Chg in FII Hold | -0.02 % | Chg in DII Hold | 0.23 % | PAT Qtr | 1,044 Cr. | PAT Prev Qtr | 813 Cr. |
| RSI | 63.6 | MACD | 20.2 | Volume | 34,81,222 | Avg Vol 1Wk | 1,33,47,711 |
| Low price | 322 ₹ | High price | 522 ₹ | PEG Ratio | 1.05 | Debt to equity | 0.28 |
| 52w Index | 82.0 % | Qtr Profit Var | -43.1 % | EPS | 28.7 ₹ | Industry PE | 18.6 |
📊 Analysis: Oil India Ltd (OIL) trades at ₹486 with a P/E of 16.9, slightly below the industry average of 18.6, suggesting fair valuation. Strong fundamentals include ROE of 13.5%, ROCE of 15.2%, and a moderate dividend yield of 2.36%. Debt-to-equity is low at 0.28, reflecting financial stability. EPS of ₹28.7 supports earnings strength, and PEG ratio of 1.05 indicates balanced valuation relative to growth. However, quarterly profit variation (-43.1%) highlights earnings volatility, and trading volumes have declined compared to weekly averages. Technicals show strength (RSI 63.6, MACD positive, above DMA levels), but the stock is near its 52-week high, limiting immediate upside.
💡 Entry Price Zone: Ideal accumulation range is ₹440–₹460, closer to DMA levels (439–428) and below current price. Long-term investors can accumulate gradually on dips.
📈 Exit / Holding Strategy: For existing holders, OIL is a solid candidate for medium to long-term investment (3–5 years) due to strong fundamentals and dividend yield. Consider partial profit booking near ₹510–₹520 (recent highs) while retaining core holdings for dividend income and sector growth exposure.
Positive
- ROE (13.5%) and ROCE (15.2%) indicate efficient capital use.
- Dividend yield of 2.36% provides steady income.
- Low debt-to-equity ratio (0.28) ensures financial stability.
- EPS of ₹28.7 reflects strong earnings base.
- PEG ratio of 1.05 suggests fair valuation relative to growth.
Limitation
- Quarterly profit variation (-43.1%) highlights earnings volatility.
- Trading volumes lower than weekly average, showing reduced investor activity.
- Stock near 52-week high (₹522), limiting immediate upside potential.
Company Negative News
- Quarterly PAT declined sharply (-43.1%) compared to previous quarter.
- FII holdings slightly reduced (-0.02%), showing marginal foreign investor caution.
Company Positive News
- DII holdings increased (+0.23%), reflecting domestic institutional confidence.
- MACD positive (20.2) and RSI strong (63.6), indicating bullish momentum.
Industry
- Industry PE at 18.6, slightly higher than OIL’s valuation, suggesting fair pricing.
- Energy sector demand remains robust, supported by global oil & gas consumption trends.
Conclusion
✅ Oil India Ltd is a fundamentally strong stock with fair valuation, healthy ROE/ROCE, and stable dividend yield. Ideal entry is ₹440–₹460. Long-term investors can hold for 3–5 years to benefit from steady cash flows and sector demand. Existing holders may book profits near ₹510–₹520 while retaining core positions for dividend income and compounding.