Oil India Ltd., the Maharatna PSU, saw brokerage firm Morgan Stanley turn “more bullish” on the stock in its recent note released on Friday.
The brokerage maintained its “overweight” rating on Oil India and raised its price target to ₹663 from ₹496 earlier, an increase of 33%. The revised price target implies a potential upside of 15% from Thursday’s closing levels.
Morgan Stanley said that it has turned more bullish as the company’s gas production has doubled in recent times.
It also highlighted that the 38 years of hydrocarbon reserve life monetisation and a Compounded Annual Growth Rate (CAGR) of operating cash flow at 14%, all of which, has taken place in the last four years.
Despite this, Oil India is still trading in single-digit multiples. At current prices, it trades at 7.7x financial year 2026 price-to-earnings multiple.
Morgan Stanley also highlighted Oil India’s dividend distribution policy and earnings, which are set to double in 2029. Both of these aspects are being underappreciated by the market, the brokerage wrote.
Shares of Oil India are trading 7% higher at ₹589.15. The stock has doubled and more so far in 2024, rising 133%, while over the last 12 months, the stock has more than tripled in value, rising 240%.
Oil India shares have gained every single month this calendar year. The stock is up 19% so far in July, which is the second-best month of the year after February, during which it had risen by 28%.
On the charts, the stock now trades in “Overbought” territory with its Relative Strength Index (RSI) at 83. An RSI above 70 indicates that the stock is in “overbought” territory.