Oil India Ltd. (OIL) Stock Near 52-Week Low: Should You Buy, Hold, or Sell?
Business and Industry Overview:
Oil India Ltd (OIL) is a government company that finds, produces, and transports crude oil, natural gas, and LPG. It works under the Ministry of Petroleum and Natural Gas and has Maharatna status, making it one of India’s top public companies. Its main office is in Duliajan, Assam, with other offices in Noida, Kolkata, Guwahati, and Jodhpur. It was first found in Digboi, Assam, in 1889. The company started in 1959 as a joint venture between Burmah Oil Company and the Indian government. In 1982, the government took full control. In 1995, it became a public company. It produces crude oil, natural gas, and LPG every year. Most of the oil and gas comes from Northeast India. The company also works in Rajasthan, Andhra Pradesh, Orissa, Tamil Nadu, Mizoram, and Arunachal Pradesh. OIL has over 100,000 square kilometers of land to find more oil and gas. It also works in Libya, Gabon, Nigeria, Sudan, Venezuela, Mozambique, Yemen, Iran, Bangladesh, and the USA.
OIL owns a pipeline from Duliajan to Barauni, Bihar to transport crude oil. It also bought Numaligarh Refinery Limited, making it a subsidiary. The company has found new oil and gas in Mozambique, Gabon, and Libya and invested in shale oil in the USA. OIL is looking for more oil and gas in Northeast India. It has started projects in Assam, Arunachal Pradesh, and Mizoram to find oil in difficult places. The company has over 100 years of experience and is growing in India and other countries.
With India targeting to achieve a $5 trillion economy by 2025–26, there is a huge surge in the petrochemical industry to fulfil the demand of the growing economy. Petrochemicals would fuel various industries that will contribute to the growth of the economy, such as agriculture, automotive, packaging, construction, manufacturing, and many more. Hence, this industry cannot be ignored, and the petrochemical demand is expected to reach $1 trillion by 2040. Recently, the Government of India has taken various initiatives, including 100% FDI through automatic routes, establishing Petroleum, Chemicals, and Petrochemicals Investment Regions (PCPIRs). It is also setting up infrastructure like 10-plus plastic parks which are to be executed between 2020 and 2035. OIL maintained an industry leadership position with a market share of 44.6% and sales volume of 85.8 MMT.
Latest Stock News:
Oil India Ltd’s stock price is ₹345.15, down 5.67% today at 13:19 IST on the NSE. The stock has been falling for five days in a row, dropping a total of 12.08%. In the past year, it has fallen 5.27%, while the NIFTY index has gone up by 0.67%. However, the Nifty Energy index (which includes Oil India Ltd) has dropped 22.84% in the same period.
In the past one month, Oil India Ltd’s stock has dropped 15.31%, while the Nifty Energy index has fallen 8.09%. The trading volume today is 29.77 lakh shares, close to the monthly average of 29.69 lakh shares.
The March futures contract for Oil India Ltd is trading at ₹346.95, down 5.76% today. The stock is still above its 52-week low but is trading below key moving averages, showing a bearish trend. However, the company offers a high dividend yield of 5.02%, which may attract long-term investors. The price-to-earnings (P/E) ratio of the stock is 9.08 based on its earnings up to December 2024.
Oil India Ltd has partnered with Mineral Exploration and Consultancy Limited (MECL) to explore and develop important minerals in India and other countries. This will help India’s energy security and growth. Recently, the company’s revenue dropped 13% from ₹9,614 crore in Q3FY24 to ₹8,337 crore in Q3FY25, but it increased 15% from the last quarter. Net profit fell 44% in one year and 29% from the last quarter. The company plans to produce more oil and gas, aiming for 4 million tons of oil and 5 BCM of gas annually. The IGGL and DNPL pipelines will improve gas transport and meet growing demand. Oil India will invest ₹6,000–7,000 crore over three years, mainly for drilling in Assam, Rajasthan, and Andaman. The Numaligarh Refinery is expanding from 3 million to 9 million tons with an investment of ₹32,000 crore. Oil India focuses on crude oil, natural gas, LPG, pipelines, and renewable energy.
Potentials:
Oil India Limited has big plans for the future. It wants to reduce pollution and become a net-zero emissions company by 2040. To do this, it will use clean energy like natural gas, solar, and wind power. It also plans to reduce methane gas pollution by 2030 and invest in new green technology.
The company will increase oil and gas production by tripling refining capacity and doubling gas production in the next five to six years. It will also build a gas pipeline to connect the North Brahmaputra fields.
For the environment, Oil India plans to save more water, stop using single-use plastic, and reduce waste gas burning (flaring) by 2030. It also aims to protect forests, cut methane pollution, and lower its carbon footprint.
Oil India is also investing in new technologies and combining them with its current work. This will help the company grow while supporting India’s clean energy goals.
Analyst Insights:
- Market capitalisation: 55,744 Cr.
- Current Price: ₹ 343
- 52-Week High/Low: ₹ 768 / 341
- P/E Ratio: 7.56
- Dividend Yield:3.06 %
- Return on Capital Employed (ROCE): 17.7 %
- Return on Equity (ROE): 18.0 %
Oil India Ltd is trading at ₹343, close to its 52-week low of ₹341. The P/E ratio is 7.56, meaning the stock is not very expensive. The dividend yield is 3.06%, and the company has a healthy payout of 25.7%.
However, profits have dropped by 36.1%, and interest costs have increased by 22.51%. The company takes longer to collect payments, which may hurt cash flow. Operating profit to interest ratio is at its lowest (8.82 times).
The stock is in a bearish trend. It has fallen 15.35% since February 10. Technical indicators like MACD, Bollinger Bands, and KST suggest further decline. Long-term investors may hold due to good dividends. Short-term traders should sell as the trend is weak. Or wait for improvement before buying.