Indian Oil stock up 1% today after strong Q2 earnings; brokerages bullish on refining margins -- check target price

Shares of Indian Oil Corporation Ltd (IOC) rose over 1 percent on Tuesday morning, after the Maharatna PSU posted a sharp 285 percent year-on-year jump in consolidated net profit for the July-September quarter. Brokerages, including Morgan Stanley and Nomura, shared a bullish outlook on the stock, citing robust refining margins and strong operational performance. The stock rose to Rs 157.48, extending the previous day's 3.2 gain.

Indian Oil Q2 FY26 results snapshot

IOC reported a consolidated net profit of Rs 7,817.6 crore for the September quarter, compared with Rs 1,999.3 crore in the same period last year. Revenue from operations rose 3.9 percent to Rs 2.06 lakh crore, while EBITDA surged 320 percent year-on-year to Rs 16,899.7 crore. On a sequential basis, profit grew 33.8 percent, even as revenue declined 7 percent.

The company’s gross refining margin (GRM) improved sharply to $19.6 per barrel in Q2, up from $2.15 in Q1 and $1.59 in the same quarter last year. Operating margin stood at 8.2 percent, better than the 7.4 percent projected by analysts. Domestic petroleum sales volumes rose 4 percent in the first half of FY26, while institutional diesel sales grew nearly 36 percent.

Indian Oil stock call: Should you buy or sell? Check brokerage views

Morgan Stanley has an Overweight rating on IOC stock with a target price of Rs 168 per share. It said that the company beat both consensus and its own core profit estimates, which stood at Rs 9,700 crore after adjustments for inventory gains and forex losses. It said IOC’s integrated margin of $12.6 per barrel (including $1.5/bbl of LPG loss) was the best in two years, aided by strong fuel refining spreads and flexibility in crude sourcing.

Nomura also shared a Buy call with a target price of Rs 160 per share, saying Q2 earnings beat expectations on account of higher refining GRMs of $10.7 per barrel, including inventory gains. The brokerage highlighted that IOC’s petrochemical segment turned profitable with EBIT of Rs 1.7 billion versus a loss in the previous quarter, while adjusted net income rose 34 percent sequentially.

Indian Oil Corp shares have gained 5.6 percent over the last one year, slightly underperforming benchmark index Nifty 50 during this period.

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