Oil India Q4 results: Strong growth in profits & production

On May 20 2024, Oil India Limited, the youngest Maharatna Central Public Sector Enterprise (CPSE) of the Government of India, announced its Q4 and FY24 results. The company saw an increase in net profit during the March quarter. The board of Oil India has also suggested paying final dividend and bonus shares in addition to this.

This blog aims to summarise the key highlights and financial performance of Oil India Limited for the fourth quarter of the fiscal year 2023-24.

Company profile

Leading state-owned company Oil India Limited (OIL) is involved in the development, production, and exploration of natural gas and crude oil. In addition, the corporation produces Liquefied Petroleum Gas (LPG) and transports crude oil.

OIL, formerly known as Burma Oil Company, was founded in 1889 and has a long history in the oil sector. In Digboi, Assam, the business discovered its first crude oil discovery. It was established as Oil India Private Ltd. in 1959 as a joint venture between the Indian government and Burma Oil Company. By 1981, OIL became a wholly-owned government enterprise and went public with an IPO in 2009.

OIL is the country’s second-biggest oil and gas corporation, operating primarily in the Upper Assam basin. The company holds a significant equity stake in Numaligarh Refinery Ltd, operating a 3 million metric tonnes per annum refinery.

The company achieved “Navratna” status in 2010 and was elevated to “Maharatna” status in August 2023. OIL, which is governed by the Ministry of Petroleum and Natural Gas, is owned by the Indian government of roughly 57%. Through its subsidiaries, joint ventures, and associates, OIL has diversified its presence across the hydrocarbon sector.

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Oil India Q4 results

Oil India Limited announced its financial results for the fourth quarter of FY 2023-24. For the quarter, the company declared an overall net profit of ₹2,332.94 crore. This represents an 18% increase compared to the ₹1,979.74 crore earned in the same period last year.

Revenue from operations for Q4 was ₹10,166 crore, which is up 16% from the previous year. There was an increase to ₹3,838 crore in earnings before interest, tax, depreciation, and amortisation, or EBITDA. The crude oil segment’s earnings before interest and tax (EBIT) increased by 18% to ₹1,744.75 crore, while the natural gas segment’s EBIT was ₹687.34 crore.

For the full fiscal year 2023-24, OIL’s net profit was ₹5,551.85 crore, down from ₹6,810.40 crore the previous year. This decrease is due to provisions made for statutory compliances. Despite this, the company achieved its highest-ever oil and gas production of 6.54 million metric tonnes of oil equivalent (MMTOE).

Crude oil production for Q4 FY24 increased by 6% year-on-year. The overall increase in crude oil production for FY24 was 5.76%, reaching 3.359 million metric tonnes (MMT) compared to 3.176 MMT in FY23. Natural gas production for Q4 FY24 also saw a growth of 3.21% over the same quarter last year, with the highest-ever annual production of 3.182 billion cubic metres (BCM).

OIL’s group turnover for FY24 was reported at ₹36,303.62 crore, down from ₹41,025.98 crore in FY23. The decrease in prices for natural gas, crude oil, and petroleum products—as well as a refinery turnaround at Numaligarh Refinery Ltd (NRL) in Q1 FY24—were the primary causes of this reduction.

(₹ crore)	Q4 FY24	Q4 FY23	YoY %
Total income	10,375.09	8,936.82	16.09
Total expenditure	7,715.18	5,850.98	31.86
Profit before tax	3,028.36	2,884.80	4.98
Profit after tax	2,332.94	1,979.74	17.84

Source: Oil India Limited Financial results

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Oil India Limited has announced a bonus share issue. For every two shares that are currently held, the board has suggested issuing a single bonus share. This means shareholders will receive one additional equity share of ₹10 each for every two shares they own.

In order to ascertain which shareholders are eligible to receive the bonus shares, the board has designated July 2, 2024, as the Oil India bonus share record date. This action is to boost the company’s share capital and compensate current shareholders.

To facilitate the bonus issue, ₹542.20 crore from the company’s free reserves will be utilised. After the bonus issue, OIL’s paid-up share capital will increase from ₹1,084.41 crore to ₹1,626.61 crore. The free reserves and share premium available for capitalisation as of March 31, 2024, stand at ₹33,832.92 crore. The estimated date for crediting or dispatching the bonus shares is on or before July 18, 2024.

In the recent Oil India share news, the board has announced a final dividend for the fiscal year 2023-24. A final dividend of ₹3.75 per equity share, having a face value of ₹10 apiece (before the bonus), has been recommended by the board. After the bonus issue, this translates to a final dividend of ₹2.50 per equity share.

At the next Annual General Meeting (AGM), the shareholders will need to approve the final dividend. The dividend will be paid out within 30 days of the AGM declaration date if it is accepted. In addition to the interim dividends that were already paid out during the fiscal year, there will be a final payout.

Earlier in the year, OIL had paid an interim dividend of ₹3.50 per share and a second interim dividend of ₹8.50 per share, both pre-bonus. In due time, the record date that will be used to determine whether shareholders are eligible to receive the final dividend will be determined and announced.

The company has shown notable performance in its share price over the past year. As of May 21 2024, Oil India share’s stood at ₹659.85, reflecting a 149.61% increase over the past twelve months. This significant rise highlights investor confidence and the company’s robust financial health.

Looking at a longer timeframe, Oil India’s share rate has increased by 258.11% over the past five years. This consistent upward trend demonstrates the company’s strong market position and its ability to generate value for shareholders over the long term.

Oil India share price over the past five years

Bottomline

Oil India’s Q4 and FY24 results highlight its robust financial health and strong operational performance. The rise in net profits, bonus shares, dividends, and steady share price growth all point to the company’s solid market position and commitment to rewarding its shareholders.

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