Oil India - March 2013 Results Preview - Motilal Oswal

- We expect Oil India to report adjusted PAT of INR5.6b (v/s INR4.4b in 4QFY12 and INR9.4b in 3QFY13). OINL's PAT is down QoQ due to higher subsidy sharing at INR26b in 4QFY13 v/s INR19b in 3QFY13 (9MFY13 quarterly average of INR20b). OINL's subsidy sharing has been ad-hoc at USD56/bbl for 9MFY13. However, due to our full year FY13E upstream sharing assumption at 40%, we model higher share of upstream in 4QFY13E. If sharing is maintained at USD56/bbl for 4QFY13, our quarterly PAT will get upgraded by 79% to INR10b.

- We estimate EBITDA at INR6.6b (up 36% YoY and down 42% QoQ). We estimate gross realization at USD113.7/bbl v/s USD119.7 in 4QFY12 and USD108.6 in 3QFY13 and net realization at USD42/bbl v/s USD38.9/bbl in 4QFY12 and USD52.6/bbl in 3QFY13.

- Subsidy sharing: For FY13E/14E/15E, Model upstream sharing at 40% (similar to FY11/FY12), and OINL's share at 13.4% of upstream. We model the company to share INR26.4b (USD71.7/bbl) in 4QFY13E.

- Our brent price assumption is USD110/bbl for FY13E/14E/15E and at USD95/bbl for long term. Model upstream sharing at 40% in FY13E-15E.

- The stock trades at 5.1x FY15E EPS of INR99.5. We remain positive on OINL due to the recently-announced diesel reforms. Buy.

Source : Equity Bulls

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