Shares of Oil India surged nearly 6% on November 6, following the company’s impressive earnings report for the second quarter of fiscal year 2024. The state-owned oil and gas firm announced a remarkable 464% year-on-year (YoY) jump in its net profit, reaching Rs 2,069 crore, up from Rs 640 crore during the same period last year.
Despite the strong profit performance, revenue for the quarter fell 8% YoY to Rs 8,136 crore. Analysts at Motilal Oswal and Kotak Institutional Equities had estimated Oil India's net profit would fall in the range of Rs 1,667.7 crore to Rs 2,123.2 crore, while revenue projections were between Rs 5,587.2 crore and Rs 5,977 crore.
The company’s net profit for the quarter ending September 30, 2024, also showed a sequential growth of 25% compared to the previous quarter, when it stood at Rs 1,834 crore. However, revenue from operations dipped by 1.6% quarter-on-quarter to Rs 5,246.2 crore.
Oil India’s earnings before interest, taxes, depreciation, and amortization (EBITDA) for Q2 2024 declined by 11.5% sequentially to Rs 2,183.2 crore. Margins also tightened from 46.3% to 41.6%. Despite the revenue and margin pressures, the significant increase in profit has been a key driver behind the stock’s strong performance.
The company also declared an interim dividend of 30%, which translates to Rs 3 per share at a face value of Rs 10. The record date for this dividend has been set for November 15, 2024.
In addition to its financial performance, Oil India made headlines with its strategic foray into the renewable energy sector. The company announced two new joint ventures aimed at advancing Compressed Biogas (CBG) projects. One of these ventures is with Hindustan Waste Treatment, while the other is in collaboration with GPS Renewables and Bharat Petroleum Corporation Limited (BPCL).
These partnerships are part of Oil India’s efforts to diversify its business and contribute to India’s growing renewable energy market. The company’s focus on sustainable energy solutions marks a significant shift as it works to align with national goals for cleaner energy.
Moreover, the company is expanding its exploration activities. Oil India is reportedly set to begin exploration in Nagaland under the Open Acreage Licensing Policy (OALP), with drilling already underway at 30 of its blocks, excluding those in Nagaland.
As of 10:39 am on November 6, Oil India shares were trading at Rs 524.55 on the National Stock Exchange (NSE), up 5.8% for the day. The stock has had an outstanding run this year, rallying around 107%, far outperforming the Nifty index, which has gained 10% over the same period.
Over the past 12 months, Oil India’s stock price has soared by 153%, more than doubling investors' capital, while the Nifty index rose by just 23%. The strong performance of Oil India underscores the company’s resilience amid global economic challenges, while also signaling its strategic shift toward cleaner energy solutions through partnerships and exploration initiatives.
