240% Gains In 1 Year: Dividend Paying Maharatna PSU Stock Hits Record High; Morgan Stanley Raises TP

The shares of Oil India Ltd, a Maharatna Public Sector Undertaking (PSU), opened with a substantial gain of 8% on Friday, reaching an all-time high of Rs 598.90 per share. This surge follows a positive note from brokerage firm Morgan Stanley, which has adopted a more bullish stance on the stock, significantly raising its price target.

Morgan Stanley has upgraded its rating for Oil India to "overweight," lifting its 12-month stock price target from Rs 496 to Rs 663-an increase of 33%. This new target suggests a potential upside of 15% from the stock's closing levels on Thursday. The bullish outlook is primarily attributed to the company's doubled gas production and robust performance in recent years.

Morgan Stanley's enthusiasm stems from several developments within Oil India. The brokerage pointed out that the company boasts a hydrocarbon reserve life of 38 years, alongside a Compounded Annual Growth Rate (CAGR) of operating cash flow at 14% over the last four years. Despite these strong fundamentals, Oil India continues to trade at single-digit multiples, currently at a price-to-earnings (P/E) ratio of 7.7x for the fiscal year 2026.

Additionally, Morgan Stanley addressed Oil India's dividend distribution policy and projected earnings, which are expected to double by 2029. These positive aspects have been largely overlooked by the market, according to the brokerage's assessment.

The stock has had an extraordinary year so far, more than doubling in value with a remarkable 133% increase since January. Over the past 12 months, it has seen an impressive rise of 240%. Notably, Oil India shares have gained in value every single month this calendar year, making July particularly strong with a 19% increase-second only to February's 28% rise. As of 1:15 pm on the National Stock Exchange, Oil India shares were trading with gains of over 4% at Rs 574.90, reflecting the ongoing bullish sentiment among investors.

From a technical perspective, the stock is currently in "overbought" territory, with a Relative Strength Index (RSI) reading of 83. An RSI above 70 indicates heightened buying pressure, suggesting that the stock may be due for a correction in the near term.

With Morgan Stanley's endorsement and robust fundamentals backing its performance, Oil India Ltd continues to capture investor interest. As the stock hits new highs, it remains to be seen whether it can maintain this momentum or if a market correction is on the horizon.