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INVESTMENT INSIGHTS

Check Before You Invest : Oil India Ltd

BSE: 533106 NSE: OIL ISIN: INE274J01014
  |   Sector:  Oil & Gas   |   Industry:  Oil Exploration

Snapshot

Q.1 Which industry/sub-sector does Oil India Ltd belong to?
Oil India Ltd belongs to the Oil & Gas sector, operating specifically within the Oil Exploration segment.
Q.2 Is Oil India Ltd a good quality company?
Oil India Ltd is a good quality company, based on a consistently good multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Oil India Ltd undervalued or overvalued?
Oil India Ltd appears Overvalued, as its key valuation ratios are higher than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 18.38 8.71
Price to Book 1.69 0.94
Price to Sales 3.84 2.15
EV to EBITDA 10.5 6.61
Q.4 Is Oil India Ltd a good buy now?
Oil India Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Oil India Ltd?
Oil India Ltd revenue growth is 3% for FY-2025, which is below its 5-year CAGR of 11.96%, indicating slower growth.

Q.2 Gross Profit margin of Oil India Ltd?
Oil India Ltd Gross profit margin which is the profit after deduction of direct costs, is 44.2% for FY-2025, which is in line with its 5-year median of 44.6%, indicating stable margins.

Q.3 Operating Profit Margin of Oil India Ltd?
Oil India Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 42.01% for FY-2025, which is in line with its 5-year median of 42.01% indicating stable margins.

Q.4 Net Profit Margin of Oil India Ltd?
Oil India Ltd Net Profit Margin is 28.66% for FY-2025, is above its 5-year median of 26.79%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 44.2 44.6
Operating Profit Margin (%) 42.01 42.01
Net Profit Margin (%) 28.66 26.79

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Oil India Ltd?
Oil India Ltd Return on Asset is 8.85%, which is in line with its 5-year historical median of 8.85%, indicating stable asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Oil India Ltd?
Oil India Ltd Return on capital employed is 15.43% for FY-2025, which is in line with its 5-year historical median of 14.86%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 11.25%, indicating value creation.

Q.7 Return on Equity (ROE) of Oil India Ltd?
Oil India Ltd Return on equity is 13.65% for FY-2025, which is in line with its 5-year historical median of 13.86%, indicating the business is making similar use of its shareholders capital.

Q.8 Cash conversion cycle of Oil India Ltd?
Oil India Ltd Cash conversion cycle is 34 days, above its 5-year historical median of 30 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 0.32 0.32
ROE (%) 13.65 13.86
ROCE (%) 15.43 14.86
Cash Conversion Cycle 34 days 30 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Oil India Ltd?
Oil India Ltd Debt-to-Equity ratio is 0.27, which is above the industry average of 0.07, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Oil India Ltd?
Oil India Ltd Debt to cash flow from operations is 1.48, which is at a moderate level.

Ownership & governance

D: Promoter shareholding and pledge status of Oil India Ltd?

Q.1 Promoter shareholding and pledge status of Oil India Ltd?
Promoters hold 56.66% of the Oil India Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Oil India Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Oil India Ltd vs industry peers?
Oil India Ltd revenue CAGR is 11.96%, compared to the industry median CAGR of 11.96%, indicating stable growth and maintaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 3 12
Gross Profit Growth (%) -10.2 22
Operating Profit Growth (%) -0.1 27.6
Net Profit Growth (%) 10.1 18.8
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.32 0.32
ROE (%) 13.65 13.86
ROCE (%) 15.43 14.86
Cash Conversion Cycle (days) 34.14 30

Valuation & price assessment

Q.1 Stock return of Oil India Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 16.1% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR		 16.1% 41.7% 41.7% 19.7%
Q.2 Valuation ratios of Oil India Ltd vs historical?
The current P/E ratio of 18.38 is higher than its historical median of 8.71, indicating that the stock is trading above its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median		 5-year
Industry Median
Price to Earnings 18.38 8.71 22.52
Price to Book 1.69 0.94 1.33
Price to Sales 3.84 2.15 4.32
EV to EBITDA 10.5 6.61 7.69

Check more companies

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