CLSA upgrades Oil India to buy
At 7.5 times FY20 PE and 6 per cent dividend yield, valuations are supportive, said CLSA.
By ET Bureau |
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MUMBAI: CLSA has upgraded Oil India to buy from underperform following the recent fall in the stock price.
At 7.5 times FY20 PE and 6 per cent dividend yield, valuations are supportive, said CLSA. Clarity on subsidies in three months would be a big trigger, the brokerage added.
CLSA said Oil India’s second quarter net profit missed its estimate by 14 per cent even as Ebitda/Ebit came 8 per cent ahead of estimates. This miss was mainly due to a large one-off forex charge, it said.
"OIL/ONGC have assumed no subsidy burden in 2Q and companies remain confident of this continuing. However, OIL’s stock is already building this risk and pricing sub-US$55/bbl post-subsidy realisation," noted CLSA.
At 7.5 times FY20 PE and 6 per cent dividend yield, valuations are supportive, said CLSA. Clarity on subsidies in three months would be a big trigger, the brokerage added.
CLSA said Oil India’s second quarter net profit missed its estimate by 14 per cent even as Ebitda/Ebit came 8 per cent ahead of estimates. This miss was mainly due to a large one-off forex charge, it said.
"OIL/ONGC have assumed no subsidy burden in 2Q and companies remain confident of this continuing. However, OIL’s stock is already building this risk and pricing sub-US$55/bbl post-subsidy realisation," noted CLSA.
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