Maharatna PSU Stock: 1:2 Bonus Shares, 2nd July - Record Date, Would Be Credited By 18th July; Buy/Sell?

The second-largest national oil and gas corporation in India, Oil India Ltd. (OIL) is a Maharatna company and a state-owned firm of the Government of India. It is administered by the Ministry of Petroleum and Natural Gas. Following the BSE 200 company's announcement of 1:2 bonus shares and a final dividend recommendation of Rs. 3.75 per share at its presentation of its Q4 and FY24 results, Oil India is the talk of the town.

Oil India Bonus Shares

Subject to shareholder approval, the Board has proposed issuing bonus shares in the ratio of 1:2, meaning that for every 02 (two) existing equity shares that are completely paid up at Rs. 10/-each, there would be 01 (one) additional equity share will be issued. As per a regulatory filing by the PSU company, the Board has designated Tuesday, July 02, 2024 as the record date for ascertaining the eligibility of shareholders to receive bonus shares.
According to OIL, on or before 18th July, 2024 is the estimated date by which such bonus shares would be credited/dispatched;

Oil India Upcoming Dividend

For the financial year 2023-2024, the Board has recommended a final dividend of Rs. 3.75 per equity share with a face value of Rs. 10/-each (pre-bonus), which turns into a final dividend of Rs. 2.50 per equity share with a face value of Rs. 10/-each (post-bonus), subject to the approval of the company's shareholders. After the date of announcement at the AGM, the final dividend would be distributed within 30 days. The final dividend will be distributed in addition to the interim dividends for the financial year 2023-24, which were paid out at Rs. 3.50 (pre-bonus) and Rs. 8.50 (pre-bonus). In due course, the record date for the final dividend payment will be determined and announced, according to OIL.

Oil India Financials

In the fourth quarter of the 2023-24 fiscal year, OIL experienced a consolidated net profit of Rs 2,332.94 crore, up 18% YoY from Rs 1,979.74 crore earned during the same time in the previous financial year. During the quarter, net income climbed by 16% to Rs 10,375 crore, with revenue from operations up 16% YoY to Rs 10,166 crore. In comparison to 3.176 million metric tonnes (MMT) generated in FY23, the company's crude oil production jumped by 5.76% totalling 3.359 million MMT in FY24. Revenue from natural gas dropped 5.46% to Rs 5,190 crore in FY24, while revenue from crude oil dropped 4% YoY to Rs 16,123 crore. Refinery product revenue plummeted by 20% to Rs 23,731 crore in the year.

Oil India Share Price Target

Deven Mehata - Equity Research Analyst at Choice Broking said, "OIL, currently trading at 650.85 levels, is showing signs of a positive technical outlook. The stock has recently rebounded from the support levels around 589 which is also close to 50 Day EMA levels, demonstrating its ability to maintain price stability. Notably, the stock has a minor resistance level at 669, which is in proximity to previous all time high levels. If the stock manages to sustain a position above this mentioned resistance, it may pave the way for an upward movement towards the target level of 699 and beyond. This is a positive development, as it signifies a potential change in the stock's trend."

"The Relative Strength Index (RSI), a momentum indicator, is currently trading at 62.81 levels. This RSI reading suggests a moderate level of strength in the stock, without being in overbought territory. It implies that there is room for the stock to potentially gather further momentum. The overall trend for OIL is sideways to Bullish, supported by various technical indicators, reinforcing the optimistic outlook. Given these signals, there is a possibility for the stock to achieve a target price of Rs 699 in the near term," the analyst commented.

"It is advisable to consider buying on dips, particularly around Rs 630, to capitalize on potential retracements in the stock price. To prudently manage risk, implementing a stop-loss (SL) at Rs 600 is recommended. This precautionary measure is crucial to safeguard investments in the event of an unexpected market reversal," Deven Mehata recommended.

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.