Amidst the pandemic, many shares of leading companies are falling in their revenue. Recently, Shares of Oil India Ltd are about 39% lower from their pre-COVID highs of January on the NSE. The valuations are engaging but muted June quarter results and low oil price outlook are likely to keep meaningful upsides at bay in the near-to-medium term. Analysts from Kotak Institutional Equities in a report on 23 August wrote, "Our reverse valuation exercise suggests that the stock is already discounting Dated Brent crude price recovering to about $50 per barrel, providing limited leverage to any improvement from current levels."

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The company announced its June quarter results on Friday evening. Following this, shares traded over 2% lower in early deals on Monday, a day when the broader markets were marginally up. The state-run oil and gas producer saw a 48% year-on-year drop in incomes for the June quarter, reflecting the clear drop in crude oil prices. The company's realizations from oil declined 54% year-on-year and nearly 42% sequentially. The company said natural gas price realization for the June quarter fell to $2.39 per million British thermal units (mmBtu) from $3.23 per mmBtu in the previous quarter. Year-on-year, crude and gas sales declined 7.5% and 4.2%, respectively.

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For some, Oil India’s high-cost structure is a concern. "We remain wary of OIL’s elevated cost structure, which does not bode well in a lower oil and gas price environment, Blended production and operating costs excluding statutory levies have increased to $13.4 per barrel in FY2020 from around $10 per barrel in FY2016-18 and standalone Capex per barrel remained elevated at around $9-10 a barrel over the past few years compared to DD&A and exploratory write-offs of $5-8 a barrel, but it has not resulted in any improvement in its reserves trajectory,"  the broking firm was quoted saying. 

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