Oil India Ltd Q1 FY2026 Concall Summary

Key Takeaways

• Crude price drove the P&L down: Average realization fell ~22% YoY to \$66.2/bbl, compressing standalone EBITDA margin from 43% to 34% and dragging standalone PAT lower.
• Consolidated PAT held up on dividends: Despite the upstream hit, consolidated PAT stayed near INR2,047 crores, supported by INR544 crores from NRL and INR780 crores from the Russian subsidiaries.
• Russian investment nearly fully recovered: Combined dividend recovery reached 95% of the original outlay, with management confident of crossing 100% for both assets this year.
• NRL expansion is the near-term catalyst: The Numaligarh refinery expansion is set for phased commissioning from December 2025, with the crude pipeline targeted for early Q4 FY26.
• What to watch next quarter: Whether the ministry grants marketing freedom or a premium pricing mechanism for new well gas, the pace of NRL commissioning, and any movement on the feeder line parallel to DNPL.

Upstream Operations & Realizations

• Production held steady with a gas uptick: Crude oil production was flat sequentially at 0.09 crore metric tons with a marginal 2% YoY dip, while natural gas rose 2.61% QoQ and 1.1% YoY to 0.83 bcm.
• Realization collapse was the quarter's story: The \$66.2/bbl average crude realization, down from \$84.89 a year ago, was the primary driver of the standalone revenue and PAT decline.
• Gas output constrained by customer shutdowns: BPCL/VCPL shut down for over 20 days, BVFCL shut down, Numaligarh took less volume, and an LPG plant shut for a month, all causing non-upliftment and frequent well settings. Management characterized these as normal maintenance events, not unusual disruptions.
• Barekuri and Kumchai are the growth pockets: Barekuri has emerged as a key volume contributor with 15 wells planned for Mission 4 plus, while the Kumchai network delivery line is stepping up.
• Provisions weighed on the cost line: INR307 crores was provided for two Bangladesh blocks, a decision increased this quarter, plus an additional provision for the Gabon block overseas joint venture. These sit within INR1,700 crores of other expenses, which management called normal for an E&P company.

Majumder: "I mean it's a very difficult question. See, crude price, nobody can predict. And as conservative entities, we also cannot make a real prediction about a major increase in the crude oil price in the days ahead."

NRL Refinery & Expansion

• Refinery ran hot in Q1: NRL operated at 106% capacity with crude throughput of 799 TMT versus 764 TMT a year ago, delivering EBITDA of INR786 crores and PAT of INR488 crores.
• GRM took an inventory hit: NRL's gross refining margin of \$5.02/bbl absorbed a \$2.93/bbl inventory loss from the crude price fall between 31 March and 30 June.
• Excise duty move helped: The 7 April excise duty hike of INR2 per liter on MS and HSD benefited NRL by INR1 per liter, adding INR118 crores to Q1 profit.
• Expansion timeline is firming up: Phased commissioning of the Numaligarh refinery expansion is expected from December 2025, with the crude oil pipeline from Paradeep to Numaligarh targeted for early Q4 FY26. Additional output from the new refinery is expected to start in H2 FY27, initially at roughly 40% of capacity, ramping to ~80% in FY28.
• Throughput target raised: NRL is targeting crude throughput of more than 3 MMT this year and expects to overshoot 100% capacity utilization again.

Gas Infrastructure & Pricing

• Infrastructure build-out is unlocking volumes: The compressor station at Baihata near Guwahati has been commissioned, and Phase 1 of the Indradhanush Gas Grid (IGGL) is complete and commissioned. Once the DNPL line is finished and IGGL connectivity is established, the customer-shutdown problem should resolve.
• DNPL capacity enhancement is the next leg: Management plans to raise DNPL capacity from 1 to 2.5 MMSCMD, which would take gas production capability to 4+ MMSCMD, supporting the target of roughly 5 Bcf.
• Feeder line proposed to the ministry: A feeder line parallel to the existing DNPL line has been proposed to MOPNG with a target completion of March 2027. DNPL is not being declared a common carrier; it remains a supplier within the Northeast, largely Assam.
• New well gas pricing is stuck in regulatory limbo: Management has requested the ministry to allow gas produced through well interventions and workovers to be supplied to NRL at the premium it is entitled to, but CGDs have statutory preference in the Northeast and are yet to come up. No timeline was given for resolution.
• Gas swapping depends on surplus: Management has also requested gas swapping with marketing freedom so NRL can lift the gas, but this can only happen once Northeast customer requirements, including CGDs, are met and the region is connected to mainland India.

Majumder: "Let us allow — let us be permitted to supply gas to the refinery at the premium. We are not kind of compromising on the premium. If the gas is produced through OIL intervention or through work over operations, the premium that we are entitled to, we must get even from the..."

Russian Assets & Dividend Recovery

• Recovery is nearly complete: 111% of the Taas-Yuryakh investment has been recovered through dividends, and 83%+ of the Vankorneft investment has been recovered, taking the combined figure close to 95%. A USD 11 million equivalent dividend was received from Taas-Yuryakh in the current quarter.
• Full recovery expected this year: Management is confident that 100% of the investment in both assets will be recovered during the current year, with dividends continuing in the years ahead. No guidance was offered on the quantum, which depends on performance, geopolitics and crude prices.
• Taas dividend outlook is conditional: Management expects a dividend similar to last year's USD 70 million from Taas, but this is explicitly conditional on the geopolitical situation and price movement.

Majumder: "We are at least sure that during the current year, 100% of investment for both the assets will be recovered by OIL. And then it will continue also further in the coming years."

Renewables & Net Zero

• INR25,000 crores earmarked for net zero by 2040: The plan spans solar, wind and compressed biogas, with multiple projects in motion across states.
• Solar build-out is material: 645 MW in Assam, 1 GW in Rajasthan, and 200 MW of green energy projects in Rajasthan are underway. A 1.9 GW solar project in North Eastern Rajasthan carries a March 2026 target. A 150 MW solar plant in Himachal Pradesh is under discussion with the state government, with no timeline yet.
• CBG and green hydrogen are early-stage: About 25 CBG plants are being set up across states, though no timeline was given. The EPC contract for a 1 MW green hydrogen plant in Baddi, Himachal Pradesh, has been awarded and work is in progress. A bioethanol plant in the Northeast will be inaugurated on 8 September.
• Hydrogen e-buses appear shelved: When an analyst asked whether the company was still doing hydrogen cell e-buses, management did not address the question.

Guidance & Commitments

Key Metrics