State-owned Oil India Limited, a Maharatna PSU stock will be in focus next week as the oil and gas giant will declare massive rewards for shareholders alongside the Q4 earnings report. Oil India is set to declare free bonus shares and recommend a final dividend for FY24. In the fourth quarter of FY24, Oil India is expected to record an upside in EBITDA sequentially, while lower Brent crude prices are seen to offset the impact of windfall taxes in the company's verticals.
Oil India Share Price:
In the special live trading session on Saturday, Oil India shares ended at Rs 646.30 apiece, up by 1.05% with a market cap of Rs 70,085.11 crore. The stock's 52-week high and low are at Rs 669.05 and Rs 240.65 apiece respectively.
Oil India Bonus Issue:
In its regulatory filing last week, Oil India said, "The Board of Directors of the Company may also consider a proposal for issue of Bonus shares in the aforesaid Board Meeting." The company's board will be meeting on May 20, 2024.
It added, "Since the Trading window is already closed for consideration and approval of Financial Results, the same period will also apply for Bonus Issues, if any."
This will be Oil India's fourth bonus share in less than fifteen years. The last time Oil India distributed free bonus shares was in March 2018 in a ratio of 1:2. Before this, Oil India also delivered a bonus issue of 1:3 in January 2017, and a 3:2 bonus in March 2012.
Oil India Dividend:
Further, Oil India has already announced that it will consider the recommendation of the final dividend for FY24, on May 20, if any.
For the fiscal 2023-24, earlier, Oil India delivered an interim dividend of Rs 8.50 per share (ex-dividend on March 18, 2024) and Rs 3.50 per share (ex-dividend on November 22, 2023).
In FY23, the company paid a dividend of up to Rs 15.50 per share. As per Trendlyne data, Oil India has delivered 35 dividends since February 2010.
At the current market price, Oil India has a dividend yield of 2.71%.
Oil India Q4 Results:
The board of directors of Oil India will meet on May 20 to consider and approve the Audited Financial Results of the Company for the Quarter & Year ended 31st March, 2024 on a Standalone and Consolidated basis.
In its Q4FY24 preview note, Kotak Institutional Equities for Oil India said, "We expect a 5% QoQ (6% yoy) increase in EBITDA mainly on lower OPEX."
Also, the brokerage added, "We model (1) overall crude oil sales volumes of 834 kt (down 1.5% qoq; up 9% yoy), (2) natural gas sales volumes of 678 mmscm (flat qoq and +10% yoy), (3) gross crude price realization of US$83.1/bbl (down 1% qoq) and net oil price realization (post royalty, windfall tax, and cess) of US$49/bbl (up 1% qoq) as lower Brent prices would be offset by a reduction in windfall taxes."
Oil India's net sales are expected to be at Rs 5,709.9 crore in Q4FY24, while PAT is seen at Rs 1,636.9 crore in the quarter.
Oil India, BUY OR SELL?
In its latest research note, brokerage Sharekhan said, "The current oil/gas price regulations provide earnings/cashflow visibility, while NRL expansion would create a long-term value for OIL. Moreover, the valuation (including earnings contribution from NRL) of 6.8x its FY2026E EPS seems reasonable, and the stock offers a healthy dividend yield of 3-4%."
It added, "The valuation would look further attractive if we include incremental earnings from NRL expansion. A potential IPO for NRL could unlock value for investors going forward. Hence, we upgrade OIL to Buy (from Hold) with an increased price target (PT) of Rs. 755 (reflects higher value for NRL)."
A Maharatna Company, OIL is a state-owned enterprise of the Government of India, under the administrative control of the Ministry of Petroleum and Natural Gas and is the second-largest national oil and gas company in India.
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