Indian Oil Corporation Ltd. share price target

oil prices range bound to support marketing margins in medium term. Also, GRMs are expected to recover with pickup in economic activity. We leave our estimates for FY22/23E unchanged....

Q1 earnings reflect a muted refining performance but recovery in marketing margin

Indian Oil Corporation net sales has increased 1.47% to Rs 119747.09 crore. Sales of Petroleum Products segment has gone up 16.21% to Rs 1,58,444.19 crore (accounting for 93.72% of total sales). Sales of Other Business Activities segment rose 2.50% to Rs 4,234.64 crore (accounting for 2.50% of total sales). Sales of Petrochemicals segment has gone up 48.75% to Rs 6,382.61...

Indian Oil Corporation (IOC) reported Q4FY21 profits better than our estimates, mainly driven by inventory gains. Revenues increased 11.6% QoQ to | 163605.7 crore (our estimate: | 170485 crore). The quarter saw strong inventory gains of US$8.1/bbl leading to reported GRMs at US$10.6/bbl (our estimate: US$4.5/bbl). EBITDA was at | 13501.8 crore (up 40.3% QoQ), above our estimate of | 7738.4 crore, mainly due to higher profitability in both refining and petchem segments. Subsequently, reported...

Lockdowns spurred by the second COVID wave in India have impacted demand for petroleum products. As stated by the company, petroleum product demand in India declined: 5%/11% for petrol/diesel in Apr'21 (v/s 2019) 33%/35% for petrol/diesel in May'21 (v/s 2019) Refinery utilization stood at ~96% in April and is at 84% in May'21; however, naphtha crackers are operating at 113% in May'21. Factoring in the same, we lower our FY22E EPS estimates by ~11%, primarily...

Indian Oil Corporation (IOC) Q3 results, Higher inventory gain and petrochemical margin boosts profits, beats estimates Indian Oil net sales fell 18% to Rs 101969.47 crore for the quarter ended Dec20 compared to corresponding previous year period. This included nil subsidy from the government compared...

Reported GRMs during the quarter were at US$2.2/bbl, below our estimate of US$4/bbl. Core GRMs were at US$1.2/bbl while inventory gain was US$1/bbl. Benchmark Singapore GRMs, while recovering from Q2 levels of US$0.1/bbl, still remained low at US$1.2/bbl in Q3FY21. Improvement in petrol & diesel cracks will be important for stable GRMs. Taking into account some improvement in demand for petroleum products, we expect GRMs at...

IOC's Q3FY21 result was a beat to our estimates owing to robust performance from marketing and petrochemicals business. The company also reported inventory gains of Rs26.3 bn (Rs9.2 bn for refinery and Rs17.1 bn for marketing). While core GRM came slightly below expectation at US$1/bbl (IDBIest US$1.5/bbl), marketing EBITDA/mt increased 33% and petrochem EBITDA/mt doubled YoY to US$335. Volume across segment rebounded to pre-covid levels where ATF is yet to catch up while Petrochem volume grew 25% YoY. Factoring higher marketing margin and up cycle in petrochem, we raise FY22E/FY23E EBITDA estimates by 11%/9%. We raise our TP to Rs113 from Rs87 earlier and...

IOC's Q2FY21 result was a beat to our estimates owing to significantly higher inventory gains. Adjusting to this, result was below our forecast on the back of negative core GRM and lower than expected marketing profits. Reported GRM came at US$8.6bbl owing to inventory gain of Rs73bn (US$9.6/bbl) while core GRM stood at negative US$1/bbl. IOC's crude throughput declined 20% YoY to 14mmt while sales volume dipped 6% YoY to 18.9mmt. While Petchem EBITDA grew a robust 56% YoY to Rs12.1 bn on better polymer cracks, pipeline EBITDA saw a decline of 19% due to 20% lower volume. Overall the company expects capex of Rs210 bn in FY21 and expects 100% utilization from Q3FY21...

IOCL's Q2FY21 EBITDA of Rs 94bn (2.6x YoY) was above estimates.