OIL - Investment Analysis

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

Investment Rating: 3.6

🛢️ Fundamental Analysis: Oil India Ltd. (OIL)

Oil India is a mid-cap PSU energy company with decent profitability and dividend yield, but it faces cyclical earnings pressure and limited growth visibility. Its valuation is fair, though not deeply discounted like ONGC.

Metric Value Implication

P/E Ratio 10.9 Fairly valued — close to industry average of 11.6

PEG Ratio 1.87 High — suggests overvaluation relative to growth

ROE / ROCE 13.4% / 13.0% Decent — but not exceptional for long-term compounding

Dividend Yield 2.38% Moderate — not a strong income play

Debt-to-Equity 0.62 Slightly elevated — manageable but worth monitoring

EPS ₹40.3 Solid — supports current valuation

Profit Growth (QoQ) -2.2% Mild decline — cyclical softness

📉 Technical & Trend Analysis

Current Price: ₹441

DMA 50 / DMA 200: ₹439 / ₹436 — trading near averages, trend-neutral

RSI: 48.5 — neutral zone

MACD: -0.84 — mild bearish signal

Volume: Slightly below average — no strong momentum

✅ Is It a Good Long-Term Investment?

Moderately attractive for tactical exposure. Oil India offers stability and reasonable returns, but lacks strong growth drivers. Suitable for investors seeking cyclical plays or moderate dividend income, not for aggressive long-term growth.

🎯 Ideal Entry Price Zone

Buy Zone: ₹410–₹430

Near technical support and below DMA levels

Accumulate only if PEG ratio improves (<1.5) and ROCE trends upward

Avoid chasing above ₹470 unless earnings growth resumes

🧭 Exit Strategy & Holding Period

If you're already holding

Holding Period: 1.5–3 years — for dividend and potential re-rating

Exit Strategy

Partial Exit near ₹700–₹750 if P/E exceeds 13 and PEG remains >1.8

Hold if ROE stays >13% and dividend payout improves

Reassess if crude prices weaken or debt levels rise further

Would you like a comparative analysis between ONGC and Oil India to decide which PSU energy stock offers better long-term value?

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