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Oil India’s 1QFY25 standalone EBITDA, at INR 25.4bn, was largely in line with JMFe/consensus of INR 25.6bn/ INR25.2bn as lower crude sales volume & realisation was offset by higher gas sales volume and realisation. But PAT, at INR 14.7bn, was lower than JMFe/consensus at INR 16.9bn/INR 17.9bn on lower other income. NRL 1QFY25 EBITDA was lower at INR 7.3bn due to weak GRM weak of USD 6.4/bbl (before excise duty benefit). Hence, consolidated EBITDA was lower QoQ at INR 32.2bn in 1QFY25 (vs. INR 34.7bn in 4QFY24). We maintain BUY (revised TP of INR 700) as risk-reward is still reasonable despite a strong rally and our expectation that OPEC+ will continue to support crude ~USD 75-80/bbl; the government allows ONGC/Oil India to make net crude realisation of ~USD 75/bbl. Also, Oil India’s earnings is likely to grow at 15-17% CAGR over the next 3-5 years driven by: a) sharp 20-30% output growth in the next 2-3 years aided by commissioning of Indradhanush gas pipeline; and b) expansion of NRL refinery from 3mmtpa to 9mmtpa. At CMP, Oil India trades at 6.9x FY27E EPS and 1.3x FY27E BV.

* Standalone EBITDA in line as lower oil sales volume/realisation was offset by higher gas sales volume/realisation; PAT lower due to lower other income: Oil India’s 1QFY25 standalone EBITDA at INR 25.4bn was largely in line with JMFe/consensus of INR 25.6bn/ INR25.2bn as lower crude sales volume & realisation was offset by higher gas sales volume and realisation. However, PAT at INR 14.7bn was lower than JMFe/consensus at INR 16.9bn/INR 17.9bn due to lower other income at INR 1.6bn (vs. JMFe of INR5.5bn) though it was partly offset by lower dry well write-off at INR 0.8bn (vs. JMFe of INR 2bn) in 1QFY25. Consolidated EBITDA was lower QoQ at INR 32.2bn in 1QFY25 (vs. INR 34.7bn in 4QFY24) due to lower EBITDA from NRL on account of weak GRM and lower throughput; consolidated PAT was INR 18.9bn (or EPS of INR 17.4).

* Crude sales volume and realisation lower; offset by higher gas sales volume and realisation: In 1QFY25, crude sales volume was 1.9% below JMFe (at 0.83mmt, down 0.7% QoQ but up 11.6% YoY) despite crude production being 0.9% above JMFe (at 0.87mmt, up 2.7% QoQ and up 6.2% YoY). Further, computed net crude realisation adjusted for windfall tax was also lower at USD 72.2/bbl vs. JMFe of USD 74.4/bbl with windfall tax being higher at USD 9.9/bbl in 1QFY25. However, gas sales volume was 4.3% above JMFe (at 0.68bcm, up 4% QoQ and up 24.3% YoY) as gas production was 1% above JMFe (at 0.82bcm, up 1.6% QoQ and up 9.8% YoY). Domestic gas realisation was also slightly better at USD 7/mmbtu.

* NRL 1QFY25 GRM weak at USD 6.4/bbl (before excise duty benefit), leads to lower EBITDA: NRL’s GRM (before excise duty benefit) was significantly lower at USD 6.4/bbl in 1QFY25 vs. JMFe of USD 9/bbl (and vs. USD 13.3/bbl in 4QFY24); crude throughput was also lower QoQ at 764mmt or 102% utilisation vs. JMFe of 795mmt (and vs. 809mmt in 4QFY24). Hence, NRL’s EBITDA was significantly lower at INR 7.3bn in 1QFY25 vs. JMFe of INR 8.7bn (and vs. INR 11bn in 4QFY24); hence, PAT was also sharply lower at INR 4.3bn vs. JMFe of INR 5.8bn (and vs. INR 6.5bn in 4QFY24).

* Maintain BUY on Oil India as it is a play on sustained high crude price scenario and strong 15-17% earning CAGR story over next 3-5 years: We have raised FY26 and FY27 consolidated EBITDA by 2% and 9% factoring in: a) higher gas output at 4.2bcm in FY26 and 4.6bcm in FY27 (but conservatively still below management guidance of 5bcm by FY26); b) reduction in NRL opex to USD 4.5/bbl from FY227 (from USD 6/bbl) due to likely reduction in opex post commissioning of pipeline along with expanded refining capacity. We also roll-forward our valuation to Sep’26, hence, our TP has been revised to INR 700 (from INR 555) based on unchanged 6x forward PE for Standalone E&P business and 7.0x forward PE for NRL. We maintain BUY as risk-reward is still reasonable despite the strong rally and our expectation that OPEC+ will continue to support crude ~USD 75-80/bbl; the government allows ONGC/Oil India to make net crude realisation of ~USD 75/bbl. Further, Oil India’s earnings is likely to grow at strong 15-17% CAGR over the next 3-5 years driven by: a) sharp 20-30% output growth in next 2-3 years aided by commissioning of Indradhanush gas pipeline; and b) expansion of NRL refinery from 3mmtpa to 9mmtpa (given the management guidance of excise duty benefits continuing for the expanded capacity as well). Every USD 5/bbl rise/fall in net crude realisation results in increase/decrease in our EPS and valuation by ~5-9% — Exhibit 7-8. Further, Oil India is also a robust dividend play (4-5%). At CMP, Oil India trades at 6.9x FY27E EPS and 1.3x FY27E BV.

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