Prabhudas Lilladher's research report on Indian Oil Corporation
Indian Oil Corporation’s (IOCL) Q1 EBITDA stood at Rs86.3bn (down 17% QoQ, PLe: Rs83.3bn) and PAT came in at Rs26.4bn (down 45% QoQ, PLe: Rs28.7bn). Sequential decline in earnings was majorly due to lower GRMs. Capacity utilization stood at 103.7%. Reported GRM came in at US$6.4/bbl, while gross marketing margin stood at Rs4.7/ltr in Q1. The stock is currently trading at 1.3/1.2x FY25/26 P/BV. Factoring in structural weakness in GRMs due to refining capacity additions amid demand concerns we build in a GRM of US$5.8/6/bbl.
Outlook
On the marketing front, we build in a gross marketing margin at Rs 4.3/4.2/ltr for FY25/26E. We re-rate the stock from ‘Reduce’ to ‘Sell’ post run-up in stock with a TP of Rs151 based on 1x FY26E P/BV.
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