OIL’s target price slashed by BofA Merrill

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OIL’s target price slashed by BofA Merrill
Since the FY11 subsidy burden on the upstream companies rose to 38.7% against the earlier 33.3%, Oil India Ltd"s target price has been slashed to Rs 1,583 from Rs 1,600 by Bank of America Merrill Lynch.

The investment banker said that it has created uncertainty about the earning of the upstream companies.

It also stated that there"s a risk that in order to cap their earnings growth, the upstream share in subsidy might be raised even in future.

Moreover, it has preserved its 'buy' rating since in spite of the increased share in subsidy, OIL's FY11 EPS is likely to be higher 13% on year.

Oil India (OIL) is a large state-owned oil and gas company in India under the administrative control of the Ministry of Petroleum and Natural Gas of the Government of India.

OIL is engaged in the business of exploration, development and production of crude oil and natural gas, transportation of crude oil and production of liquid petroleum gas.

Read more about: oil and gas, bse, nse, oil india
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