Oil India Limited is an upstream oil company engaged in the exploration, development, and production of crude oil and natural gas, transportation of crude oil and production of liquified petroleum gas. It also provides various exploration and production-related services for oil blocks. The company also owns a majority stake in Numaligarh Refinery in Assam. The company has come under the spotlight thanks to the recent rally in crude oil prices.
Its financial performance and outlook haveimproved. The company management is also more confident. The impact of the improved outlook is also visible in Oil Indiashare price performance. In the last year, its share price has climbed 105% (June 13, 2022). Given how analysts are upbeat about the stock, the rally may continue.
Crude oil prices
The most crucial aspect for the company is how thecrude oil prices move ahead. As of June, it is trading at around $120 per barrel in the international market. Oil analysts have predicted it could go as high as $150 per barrel. If this happens, Oil India will likely reap windfall gains. Moreover, improving refining margins are also a plus.
The company management, in a recent interaction with shareholders, said. “Our margins this year are also going to be very high if things remain the way it is today,” said Bhaskar Jyoti Phukan, Managing Director, Numaligarh Refinery, in early June 2022.
The analysis of the strengths, weaknesses, opportunities, and threats by ICICIdirect flashes extremely positive signals for Oil India share. The study counts 13 strengths the company has today, compared to two weaknesses. There are two opportunities against zero threats.
Among the key strengths are:
-High Piotroski score, meaning it is a company with strong financials
-Company has reported increased profits every quarter for the past four quarters and increased revenue every quarter for the past three quarters
-Company with high TTM EPS Growth
-It reported quarter-on-quarter and year-on-year profit growth with higher margins
-Zero promoter pledging of shares
-Foreign investors are increasing their shareholding
–Oil India Limited share price has rallied more than 20% in a month and is now above short-, medium- and long-term moving averages
Weaknesses, according to ICICIdirect, are Mutual Funds decreasing their shareholding in the last quarter and a negative breakdown below first support on technical charts. Opportunities lie with the fact that Oil India share price BSE has seen the highest recovery from 52-week lows, and it is a stock with a low price-to-earningsratio.