Indian Oil Corporation’s (IOC) Q1FY16 results were above our estimates on the profitability front. The topline increased 33.3% QoQ to | 107200.7 crore, above our estimate of | 88652.1 crore. However, revenues were marginally below our estimates, adjusting for change in accounting method due to Ind-AS. EBITDA at | 13683.5 crore was above our estimate of | 7015 crore due to higher-than-expected GRMs of US$10/bbl (our estimate: $6.7/bbl) supported by higher-than-expected inventory gain . PAT increased 5.7x QoQ to | 8269 crore, above our estimate of | 3621.8 crore. There was nil subsidy burden in the current quarter.

Valuation: ICICI Securities Limited have a BUY recommendation on the stock with a target price of | 670 (based on average of P/BV multiple: | 593/share and P/E multiple: | 747/share).