Oil India Q1 FY27 earnings call

Oil India Limited reported its highest ever standalone quarterly operating revenue of INR 7,958 crores for Q1 FY27. This strong performance translated into the highest ever standalone EBITDA of INR 4,605 crores, with a robust margin exceeding 54%, significantly up from 34% in the previous year. The company also achieved its highest ever standalone PAT of INR 2,870 crores, a substantial increase from INR 813 crores in Q1 FY26, leading to an EPS of Rs. 17.65 per share. On a consolidated basis, operating revenue stood at INR 12,886 crores and PAT at INR 4,026 crores, also marking a record high.

Crude oil production for Q1 FY27 reached 0.95 MMT, representing an increase of over 11% year-on-year. The company achieved its highest ever daily crude oil production of 10,921 MT per day on June 27, 2026. Crude oil price realization was USD 98.73 per barrel, a significant increase compared to USD 66.20 per barrel in the previous year. Management expressed confidence in reaching 1 MMT of crude oil production each quarter for the remainder of FY27, targeting a minimum of 3.9 MMT for the full year and 4.2 MMT by FY29.

Natural gas production increased by 0.4% quarter-on-quarter, with a realization of USD 7.19 per MMBtu. However, the company faced an 8% year-on-year decrease in gas production due to various factors, including shutdowns by downstream industries like BCPL and seasonal rains impacting consumption by tea gardens. NEEPCO's preference for hydro power over gas-based power when gas prices are high also contributed to reduced off-take. To address monetization challenges, the company is progressing with pipeline infrastructure, expecting the evacuation bottleneck to be resolved by the end of next year, with a target of 3.8 BCM for FY28 and 5 BCM once the DFL is connected.

NRL, a material subsidiary, reported a strong Q1 FY27 with an operating income of INR 9,146 crores, a 45% increase over Q1 FY26. The refinery operated at 105% capacity utilization with an 87% distillate yield. Its Gross Refinery Margin (GRM) was USD 35.95 per barrel, significantly higher than USD 5.02 per barrel in the previous year, though this included an inventory gain of USD 2 per barrel. NRL's EBITDA was INR 1,843 crores, and PAT was INR 1,305 crores. Key expansion units, CDU VDU, DHDT, and SRU, are expected to be commissioned by October/November, with the remaining units by March 31, 2027, aiming for 75% capacity utilization by Q4 FY28.

Oil India incurred a capital expenditure of INR 3,050 crores in Q1 FY27, allocated across survey (INR 450 cr), exploratory drilling (INR 1,230 cr), development drilling (INR 700 cr), capital equipment (INR 350 cr), and investments in subsidiaries/JVs/overseas (INR 350 cr). The total FY27 capex budget is INR 8,600 crores. The company's total group debt stands at INR 37,233 crores, comprising INR 19,000 crores from NRL, a USD 1.4 billion loan for the Mozambique project, and a USD 500 million bond from a foreign subsidiary due for repayment in May 2027.

Exploration activities in Andaman are advancing, with the first well in Vijayapuram 1 undergoing hydro frac testing, expected to be complete within a month. The fourth well in Andaman is planned for drilling by December 2026 using a jack-up rig. The company has acquired 600 square kilometers of 3D seismic data around Vijayapuram 2 and 3, which is currently being processed by October and interpreted by January. This data will inform the planning of appraisal wells to delineate the reservoir further, with TOTAL and Petrobras providing technical advisory.

The company addressed two significant regulatory items. Regarding the Assam land tax, the government of Assam's counsel has undertaken to withdraw the law, and its repeal is expected, which would remove this contingent liability from Oil India's books. For GST on royalty, a liability of approximately INR 2,500 crores (excluding interest) has been identified. The company is working to make this payment within a six-week timeframe, as directed by the court, and this will be reflected in the Q2 FY27 financials.