Oil India shares jump over 15% in 3 sessions on these 2 triggers – Check what brokerages say

Shares of oil exploration and production company Oil India jumped over 15 per cent after surging for the third straight session on Wednesday. The surge in the stock came on the back of two main triggers – Strong March quarter results for FY22 and a rise in the crude oil prices globally.  

The scrip on Wednesday gained over 5 per cent to Rs 251 per share on the BSE intraday. The counter is trading near its 52-week high of Rs 267.7 per share on October 01, 2021.  

The company reported strong earnings in March 2022 quarter (Q4FY22), as turnover and profit after tax (PAT) gained by 74 per cent and 92 per cent, respectively. 

Oil prices rose in early Asian trade on Wednesday after European Union leaders agreed to a partial and phased ban on Russian oil and China ended its COVID-19 lockdown in Shanghai, according to a Reuters report on Wednesday. 

The Brent crude for August delivery was up 78 cents, or 0.7%, at $116.38 a barrel at 0037 GMT and U.S. West Texas Intermediate (WTI) crude rose 63 cents, or 0.6%, to $115.30 a barrel. 

ICICI Securities on Oil India believe consolidated earnings may have peaked out in the near term, with its FY23-24E estimates factoring in some moderation in NRL (Numaligarh Refinery Limited) GRMs (gross refinery margins and also Brent crude price of US $85 per barrel.  

Even so, steady production growth, upside risk to price, GRM estimates, and attractive valuations make Oil India’s risk-reward compelling at current levels, said ICICI Securities reinitiating a Buy coverage with a target price of Rs 350 per share (40 per cent upside). 

Oil India has outperformed the Sensex by 75 per cent over the last twelve months, as Brent crude price increased by around 60 per cent, HDFC Securities said, expecting the company to continue its the outperformance.