KR Choksey is bullish on Indian Oil Corporation has recommended buy rating on the stock with a target price of Rs 185 in its research report dated May 21, 2019.
KR Choksey's research report on Indian Oil Corporation
Revenues came in at INR 1,262.1 bn, up 7.6% YoY declining QoQ by 9.8% due to lower throughput QoQ of 17.35 MMT (18.9 MMT in QFY19 and 17.2 MMT in Q4FY18). Gross margins improved significantly QoQ (+870 bps) to 17.7% (-155 bps YoY) on the back of inventory gains of INR 5.95 bn as against inventory losses of INR 49.5 bn in Q3FY19. GRM for the quarter came at 4.09/bbl v/s $9.12/bbl in Q4FY18 due to weak light and middle distillate spreads. Employee expenses increased by 32.3% QOQ (-1.4% YoY) due to one-time contribution for super-annuation benefit scheme, while other expenses also increased by 25.8% QoQ, although it was negated to some extent by forex gains of INR 8.4 bn as v/s forex losses of INR 6.7 bn in Q4FY19 leading to an operational performance with OPM at 8.6% (-73 bps YoY, +604 bps QoQ). EBITDA stood at INR 108.7 bn (-0.9% YoY, +201.3% QoQ). Finance cost increased by 46.7% QoQ (-0.4% YoY) while other income increased by 139.1% QoQ (+327% YoY) leading to PAT at INR 61.0 bn with NPM of 4.8% (+38 bps YoY, +432 bps QoQ). The board has declared a final dividend of INR 1/share on a FV of INR 10.
We maintain our EV/EBITDA-based multiple target price of INR 185 (potential upside – 17.8%). We maintain BUY rating on the stock.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
The Great Diwali Discount!
Unlock 75% more savings this festive season. Get Moneycontrol Pro for a year for Rs 289 only.
Coupon code: DIWALI. Offer valid till 10th November, 2019 .