Buy IOCL; target of Rs 165: Motilal Oswal

Motilal Oswal is bullish on IOCL recommended buy rating on the stock with a target price of Rs 165 in its research report dated January 24, 2024.

Broker Research

January 29, 2024 / 19:46 IST

Buy

26 Aug, 2025 12:21

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Motilal Oswal's research report on IOCL

IOCL reported beat on our EBITDA at INR155b (up 2.9x YoY), led by betterthan-expected GRM at USD13.5/bbl (vs. our est. of USD10.2/bbl) and higher marketing GM at INR4.5/lit. (vs. our estimate of INR3.1/lit). Refining throughput came in line with our estimate at 18.5mmt (up 4% YoY). In the marketing segment, domestic sales volumes were also in line with our estimate at 23.3mmt (up 1% YoY). Singapore GRM has rebounded to USD7.2/bbl in 4QFY24 till date from USD5.5/bbl in 3QFY24, which may lead to an improvement in the refining performance in the coming quarter. OMCs are estimated to be generating a marketing margin of INR11/8.6 per lit on petrol/diesel in 4QFY24 till date. However, margins may be affected by retail fuel price cuts in the wake of upcoming elections and/or a rise in crude oil prices due to quota management by OPEC+. Petchem sales volumes increased 80% YoY to 0.67mmt (0.37mmt in 3QFY23). The Petchem segment reported an EBIT loss of INR2b. Petchem margins have increased 69%/89% for PE/PP in 4QFY24’td, which may lead to an improvement in the petchem segment in the upcoming quarter.

Outlook

Owing to robust performance in 9MFY24, we increase our EBITDA/PAT estimates by 12%/16% for FY24, while keeping FY25-26 estimates broadly unchanged. The stock trades at 8.6x consolidated FY25E EPS and 1.1x FY25E P/BV. We reiterate our BUY rating on the stock, valuing it at 1.2x Dec’25E P/BV.

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