Analyst Corner| Final rating on OIL ‘hold’, final target price Rs 140
We are terminating coverage of Oil India Limited due to a reallocation of resources. Our final target price is Rs 140 (earlier Rs 90), and our final rating is ‘hold’. Please note that you should no longer rely on any previous research, ratings, target prices or estimates for this company.
HSBC has decided to terminate equity coverage of Oil India due to a reallocation of resources. Please note that you should no longer rely on any previous research, ratings, target prices or estimates for this company.
We base our final target price of Rs 140 (earlier Rs 90) on a sum-of-the-parts approach. We value the company’s consolidated core business at a 2022e PE of 8.0x (earlier 6.0x). This target multiple is based on 10Y mean multiple (earlier -1SD from 10Y mean) given reduced COVID-19 related risks and a recovery in oil prices. We value the company’s listed investments at a holding company discount of 25% to their current market prices to factor in market volatility.
