State-owned Maharatna enterprise Oil India Limited has initiated a major green energy expansion in North India through its subsidiary, signing clean energy agreements with the Haryana state government. The initiatives involve establishing four integrated waste-to-energy processing plants across major urban centers, aimed at handling municipal solid waste scientifically while producing alternative fuels and power.
Waste-to-Energy Expansion Across Haryana Municipalities
OIL Green Energy Limited, the subsidiary of Oil India Limited, entered into Memorandum of Understanding (MoU) agreements with four key municipal corporations in Haryana: Gurugram, Faridabad, Hisar, and Ambala. Under this strategic framework, the company will construct and operate integrated Compressed Biogas (CBG) and Waste-to-Energy facilities across all four municipal clusters. The project roadmap outlines a combined processing capacity of 5,000 tonnes of municipal solid waste per day (TPD).
The waste treatment allocation differs across the selected urban clusters based on regional volume requirements. The Hisar unit is planned for 500 TPD capacity, Ambala for 900 TPD, Faridabad for 1,600 TPD, and Gurugram for the largest share at 2,000 TPD. Once operational, the four combined plants are projected to produce between 70 to 75 TPD of Compressed Biogas along with 50 MW of green electricity, boosting the state's renewable energy supply.
Stock Market Performance and Valuation Metrics
Shares of Oil India Limited witnessed positive momentum during early trading hours on Monday following the weekend announcement of the clean energy deal. However, the stock gave up its early gains as the session progressed. By 12:34 pm on Monday, the PSU equity was trading marginally lower by 0.04% at Rs 483.25 per share on the BSE, representing a market capitalization of Rs 78,605.82 crore.
Brokerage Analysis and Target Price Projections
Financial brokerage Emkay Global retained a positive long-term view on Oil India Limited, reiterating its 'Buy' rating with a target price of Rs 625 per share. Analysts highlighted that favorable oil and gas realisations, robust Gross Refining Margins (GRMs), alongside expanding natural gas sales and Numaligarh Refinery Limited (NRL) capacity expansion, serve as fundamental tailwinds for the energy firm.
On operational benchmarks, the brokerage noted that Oil India has already met its initial Mission 4+ goal of 4 million metric tonnes per annum (mmtpa) in crude output, operating at a current extraction pace of roughly 11,000 tonnes per day (ktpd). The company's executive leadership anticipates raising total crude output further to 4.2 mmtpa by FY29.
Financial Projections and Return Capital Profile
Emkay Global outlined a improving capital efficiency profile for Oil India over the coming financial years. The firm's consolidated Return on Invested Capital (ROIC) is projected to climb from 10% in FY26 to approximately 15% across the FY27-FY29 period.
Furthermore, as Oil India's major capital expenditure phase nears completion, its Free Cash Flow to Firm (FCFF) yield is forecasted to transition from a negative 8-9% in FY26-27 to a positive +4-6% in FY28-29. Driven by these operational metrics, the brokerage revised its FY27 EPS estimate upward by 10%, while retaining its earnings forecasts for FY28 and FY29.
