Shares of Oil India Limited, the state-owned oil and gas producer, declined by as much as 4.5% to ₹405.60 on February 10, 2025. The fall came after the company reported a 23% year-on-year (YoY) decline in net profit for the October-December quarter (Q3 FY25).
The market reaction has raised concerns among investors, particularly those involved in share market investment.
Q3 financial performance sees profit decline
Oil India reported a net profit of ₹1,221.80 crores in Q3 FY25, a sharp decline from ₹1,584.28 crores recorded in the same period last year. The drop in earnings was attributed to lower crude oil prices, which impacted revenue generation. The company's realisation per barrel of crude oil stood at USD 73.82, down from USD 84.14 in Q3 FY24.
The company's earnings before interest, tax, depreciation, and amortisation (EBITDA) also witnessed a decline, falling to ₹2,321.34 crores from ₹2,613.75 crores in the previous year. Lower crude prices led to a drop in total turnover, which stood at ₹5,239.66 crores compared to ₹5,815.02 crores in Q3 FY24.
Stable production, but revenue pressures persist
Despite financial pressures, Oil India's crude oil and natural gas production remained largely stable. The company produced 0.868 million tonnes of crude oil and 0.829 billion cubic meters of natural gas during Q3 FY25.
For the first nine months of FY25, net profit increased by 28% to ₹4,522.71 crores, supported by higher production levels earlier in the fiscal year. Crude oil production for the April-December period rose by 4.10% to 2.614 million tonnes, while gas production saw a 2.90% increase, reaching 2,446 million standard cubic meters.
Interim dividend declared
Oil India's board has announced an interim dividend of ₹7 per share. With this latest payout, the total interim dividend declared by the company for FY25 has reached ₹10 per share. The dividend announcement may offer some relief to investors amid the ongoing stock price fluctuations.
Stock market performance and investor outlook
Over the past year, Oil India's share price has demonstrated significant growth, gaining nearly 33% despite the recent decline. Oil India shares were trading at ₹409.50 as of 10:15 AM on February 10, 2025. However, the latest financial results and crude oil price fluctuations have led analysts to adopt a cautious outlook.
Investors engaged in share market investment will be closely monitoring future developments, particularly movements in global crude oil prices and potential shifts in production levels. Market experts suggest that Oil India's long-term performance will largely depend on oil price recovery and operational efficiency in the coming quarters.
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