Motilal Oswal Financial Services (MOSL) has initiated a Buy call on Oil India, setting a target price of Rs 720 per share, implying a significant upside from its current market price (CMP) of Rs 573.10. MOSL’s report highlights key growth drivers and strong production outlook for the company in the coming years.
Key factors driving MOSL’s Buy call:
- Standalone business valuation: MOSL values Oil India’s standalone business at 7 times the projected FY27 earnings per share (P/E), suggesting attractive valuations at current levels.
- Production growth outlook: Oil India is expected to post a compound annual growth rate (CAGR) of 9% in production over the FY24-27 period, driven by robust operational performance and increasing capacity.
- Expansion of refinery capacity: The expansion of Oil India’s refining capacity is seen as a key contributor to its future growth, positioning the company to meet rising demand in the energy market.
- New City Gas Distribution (CGD) projects: The addition of new CGD projects is expected to drive further demand for Oil India’s products, enhancing its business prospects over the next few years.
MOSL remains optimistic about Oil India’s production growth, refinery expansion, and the positive impact of new CGD projects, seeing these as strong drivers for the company’s future performance.
Disclaimer: Stock market investments are subject to market risks. This article is for informational purposes only and should not be construed as financial or investment advice. Please consult a financial advisor before making any investment decisions.
