Oil India Ltd. is Rated Hold by MarketsMOJO

Current Rating and Its Significance

MarketsMOJO’s 'Hold' rating for Oil India Ltd. indicates a balanced outlook for investors. It suggests that while the stock is not currently a strong buy, it is also not recommended for selling. This rating reflects a moderate risk-reward profile, where investors may consider maintaining their existing positions but should be cautious about initiating new large exposures without further developments. The rating was revised from 'Sell' to 'Hold' on 28 January 2026, accompanied by a notable improvement in the company’s Mojo Score from 41 to 54, signalling a more stable outlook.

Here’s How the Stock Looks TODAY

As of 09 February 2026, Oil India Ltd. exhibits a mixed but cautiously optimistic profile across key investment parameters. The company’s stock price has shown resilience with a one-year return of 14.90%, outperforming the broader BSE500 index over the same period. The stock’s recent performance includes a 1-month gain of 16.15% and a year-to-date increase of 14.97%, despite a slight dip of 1.86% on the day of reporting.

Quality Assessment

Oil India Ltd. earns a 'good' quality grade, underpinned by strong management efficiency and operational metrics. The company’s Return on Capital Employed (ROCE) stands at a robust 15.58%, reflecting effective utilisation of capital to generate profits. Additionally, the firm maintains a conservative debt profile, with an average Debt to Equity ratio of 0.42 times, which is favourable in the capital-intensive oil sector. These factors contribute to a stable operational foundation, although recent quarters have seen some challenges.

Valuation Perspective

The valuation grade is assessed as 'fair'. Oil India Ltd. trades at an Enterprise Value to Capital Employed ratio of approximately 1.3, indicating that the stock is priced at a discount relative to its historical peer valuations. This discount may appeal to value-oriented investors seeking exposure to the oil sector at reasonable prices. However, the company’s Return on Capital Employed for the half-year period has declined to 10.55%, signalling some pressure on profitability that investors should monitor closely.

Financial Trend Analysis

Financially, the company faces headwinds, reflected in a 'negative' financial grade. Despite healthy long-term growth trends—net sales have grown at an annualised rate of 28.67%, and operating profit has surged by 155.07% over the years—the last five consecutive quarters have reported negative results. Operating profit to interest coverage has fallen to a low of 7.55 times, and interest expenses have risen sharply by 53.34% in the latest quarter, reaching ₹305.24 crores. These factors highlight increased financial strain, which tempers the otherwise positive growth trajectory.

Technical Outlook

From a technical standpoint, the stock is rated as 'mildly bullish'. Recent price movements show steady gains over the past three months (+12.54%) and six months (+13.05%), suggesting a positive momentum. Institutional investors hold a significant 36.84% stake, indicating confidence from knowledgeable market participants who typically conduct thorough fundamental analysis. This institutional backing often provides a stabilising influence on the stock price.

Investment Implications

For investors, the 'Hold' rating implies that Oil India Ltd. currently offers a balanced risk-reward profile. The company’s strong management efficiency and reasonable valuation provide a foundation for potential upside, but the recent negative financial results and rising interest costs warrant caution. Investors should weigh these factors carefully and consider maintaining existing positions while monitoring upcoming quarterly results and sector developments.

Long-Term Performance and Peer Comparison

Over the last three years, Oil India Ltd. has delivered consistent returns, outperforming the BSE500 index annually. This steady performance is notable given the volatility often experienced in the oil sector. The company’s market capitalisation places it in the midcap category, where growth prospects are balanced with moderate risk. Compared to peers, the stock’s valuation discount and institutional support provide a relative advantage, although investors should remain vigilant about the company’s recent earnings volatility.

Summary of Key Metrics as of 09 February 2026

• Mojo Score: 54.0 (Hold grade)
• ROCE: 15.58% (high management efficiency)
• Debt to Equity: 0.42 times (low leverage)
• Net Sales Growth (annualised): 28.67%
• Operating Profit Growth: 155.07% (long-term)
• Interest Expense Growth (quarterly): 53.34%
• Operating Profit to Interest Coverage: 7.55 times (lowest recent)
• Institutional Holdings: 36.84%
• Stock Returns (1Y): +14.90%

These figures illustrate a company with strong operational fundamentals and growth potential, tempered by recent financial challenges. The 'Hold' rating reflects this nuanced outlook, advising investors to maintain a watchful stance while recognising the stock’s underlying strengths.

Outlook for Investors

Investors considering Oil India Ltd. should focus on upcoming quarterly results and sector dynamics, particularly global oil price trends and regulatory developments. The company’s ability to manage rising interest costs and return to consistent profitability will be key determinants of future rating adjustments. Meanwhile, the current 'Hold' rating suggests a wait-and-watch approach, balancing the stock’s attractive valuation and quality metrics against recent financial headwinds.

Conclusion

In summary, Oil India Ltd.’s current 'Hold' rating by MarketsMOJO, updated on 28 January 2026, reflects a stock with solid quality and valuation fundamentals but facing short-term financial pressures. As of 09 February 2026, the company’s performance and metrics indicate a cautious but stable investment proposition. Investors should consider maintaining positions while monitoring developments closely to capitalise on potential future opportunities.

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