Prabhudas Lilladher's research report on Indian Oil Corporation
We change our FY24/25E earnings by 20%26% to factor in actual FY23 numbers. IOCL reported better than expected Q4 results with standalone EBITDA of Rs153.4bn (+327%QoQ; PLe Rs 92.5bn) and PAT of Rs100.6bn (PLe Rs41.8bn), due to higher than expected GRMs at USD15.2/bbl (Q3: USD12.9; PLe USD9.6). Earnings surprise came despite Q4 refining inventory loss of Rs43.8bn.
Outlook
We believe OMCs are well placed to benefit from improving marketing margins and healthy refining profitability. We maintain ‘’BUY” with a PT of Rs125 based on EV/EBITDA of 5.5x FY24E (7x earlier) as earnings environment stabilizes. Retain Buy .
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