1. At a Glance
Ladies and gentlemen, Oil India Ltd (OIL) — the PSU that smells like crude oil and prints cash like a refinery — just dropped its Q2 FY26 results, and it’s dripping in hydrocarbons and government oversight. The stock trades around ₹425 with a market cap of ₹69,147 crore, making it the junior (but flashier) cousin of ONGC. Over the last three months, it’s inched up 3.8%, proving that even PSUs can crawl forward if the dividend yield (2.7%) is juicy enough.
This “Maharatna” isn’t just a title flex; OIL’s empire spans from crude oil and natural gas to LPG, pipelines, solar power, and even a flirtation with hydrogen buses (because why not?). For Q2 FY26, the company reported consolidated sales of ₹8,394 crore, up 15.8% YoY, though profit after tax cooled to ₹1,640 crore — a 29% dip. That’s like gaining weight in revenue but losing muscle in margins.
With an EPS of ₹8.78 this quarter, a P/E of 11.6, ROE of 13.3%, and a debt-to-equity ratio of 0.64, Oil India is the reliable uncle of the energy sector — conservative, cash-rich, and slightly slow to modernize but impossible to ignore.
2. Introduction
There’s something poetic about a company literally namedOil Indiabeing the face of a country that’s obsessed with petrol prices. This PSU has been drilling the Indian earth for black gold since before “renewable” became a cool word at Davos. It’s the middle child between ONGC (the overachiever) and the private explorers (the drama queens).
In August 2023, OIL earned the Maharatna badge — a bureaucratic way of saying, “Now you can spend ₹5,000 crore without asking Delhi for permission.” Since then, the company’s been acting like it owns the entire northeast, drilling wells from Assam to Arunachal, expanding its Numaligarh Refinery (NRL) to 9 MMTPA, and setting up solar parks and hydrogen projects that would make Greta Thunberg mildly impressed.
Despite the sector’s volatility, Oil India’s consistency is admirable. Even when crude prices swing harder than a Delhi election result, this company manages to keep its margins and dividends intact. Sure, the Q2 profit dipped 29%, but this is the oil business — margins evaporate faster than petrol fumes.
Still, investors love OIL for one reason: it’s stable, predictable, and pays dividends like it’s rewarding patriotism. But behind that shiny Maharatna badge lies a fascinating story of seismic surveys, refinery expansions, and more joint ventures than a startup founder on LinkedIn.
3. Business Model – WTF Do They Even Do?
So what does Oil India actuallydo? In simple terms — it digs holes, finds oil and gas, pumps them out, and sells them. But let’s make that sound more sophisticated for LinkedIn: “Oil India engages in exploration, development, and production of hydrocarbons, while diversifying into renewable energy and refining through its subsidiaries.”
Its revenue split as of 9M FY24 says it all:
- Refinery:50% (thanks to Numaligarh Refinery Ltd, or NRL — its most profitable child)
- Crude Oil:37%
- Natural Gas:12%
- Pipeline Transport:1%
NRL alone is the crown jewel — currently scaling from 3 MMTPA to 9 MMTPA, backed by a ₹35,000 crore mega capex. The refinery’s output doesn’t just serve India; it’s literally flowing into Bangladesh through a new 130 km export pipeline. Cross-border fuel diplomacy? Check.
On the upstream side, OIL operates across eight Indian states, with reserves of 70.56 MMT of crude oil and 138.51 BCM of gas. It’s sitting on more acreage than a DLF brochure — 62 operating blocks over 62,911 sq km. The company even drilled 45 wells in FY23, discovering new hydrocarbons in Sesabil, Assam.
And because it’s 2025, they’re now experimenting with hydrogen-blended gas, biofuel plants, and solar projects — basically, trying to stay relevant when “crude” becomes a bad word.
4. Financials Overview
Quarterly Comparison Table (₹ crore)
| Metric | Q2 FY26 | Q2 FY25 | Q1 FY26 | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue | 8,394 | 7,247 | 7,929 | 15.8% | 5.9% |
| EBITDA | 2,303 | 2,536 | 2,351 | -9.2% | -2.0% |
| PAT | 1,640 | 2,069 | 2,047 | -20.7% | -19.9% |
| EPS (₹) | 8.78 | 12.40 | 11.66 | -29.2% | -24.7% |
Source: Screener Data (Consolidated Figures in ₹ crore)
So yeah, sales are up, but profit’s down — the classic PSU paradox. The drop in profit margin (27% OPM vs 35% last year) could make an analyst cry, but the dividend of ₹3.50/share cushions the blow. If earnings are a rollercoaster, at least the dividend is a seatbelt.
5. Valuation Discussion – Fair Value Range
Let’s put the numbers under the valuation microscope:
- EPS (TTM): ₹36.7
- P/E (CMP ₹425):11.6×
- EV/EBITDA:7.86×
- Industry P/E:17.4×
- Book Value:₹346 → P/B = 1.23×
⚙️ 1. P/E Method
If industry average is 17.4× and OIL trades at 11.6×, applying a conservative range of10×–14×gives:
- Fair Value = ₹36.7 × 10 = ₹367
- Fair Value (upper range) = ₹36.7 × 14 = ₹514
So, educational fair range by P/E:₹370–₹510
⚙️ 2. EV/EBITDA Method
EV = ₹95,707 crore; EBITDA (FY25 TTM) = ₹9,785 crore→ EV/EBITDA = 9.78× (but reported 7.86× due to cash & investment adj).Fair range using 7×–9× →₹400–₹520
⚙️ 3. DCF (Simplified)
Assume FCF ₹11,000 crore, growth 5%, discount rate 10%.Fair value ≈ ₹430–₹480 per share.
🎯 Educational Fair Value Range:₹370 – ₹520Disclaimer: This fair value range is for educational purposes only and not investment advice.
6. What’s Cooking – News, Triggers, Drama
You know a PSU’s alive when its “Announcements” section reads like a soap opera. Here’s the latest masala from OIL’s regulatory buffet:
- Mozambique comeback:The Rovuma Basin (13.12 MMTPA LNG project) finally escaped “force majeure” jail. OIL’s 40% stake might start producing soon — global gas prices, here we come.
- BPCL + OIL + NRL refinery tri-party:₹1 lakh crore Ramayapatnam refinery in Andhra Pradesh (9–12 MMTPA) — that’s not a project, that’s a GDP booster.
- Green JV with Rajasthan:1.2 GW solar-wind power plant with RVUNL — because even crude wants to feel eco-friendly.
