'Hold' Oil India -TP Rs.474 - Geojit BNP Paribas Financial Services Limited

- Hold rating on Oil India Limited is maintained with a lowered target price of Rs.474. Target price earlier was Rs.549.60.

- Considering the increase in cess from Rs.2500/ton to Rs.4500/ton company's EBITDA is cut by Rs.800 crore and expected earnings for FY13-14 reduced by 11%.

- Incremental capex declined significantly in FY12 and hence the company may not be able to ramp up production due to delays in project implementation.

- Crude oil production may remain flat in FY13 due to the 60 days shutdown of NRL.

- It seems that the stock is fairly valued at the current price and the upside potential is limited.

Source : Equity Bulls

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