Indian Oil Corporation Ltd. share price target

The recent movement in oil prices with Delta variant of COVID and OPEC+ output should boost the performance of the company in the medium-term. Hence, we reiterate our BUY rating on the stock with a revised target price of Rs. 126 based on SOTP valuation. Topline impacted sequentially with slowness in demand In Q1FY22, IOCL's revenue increased 74.3% YoY to Rs. 155,056cr due to increase in demand for petroleum products and petrochemicals. However, on sequential basis, revenue declined 5.2% on slowness in demand for these products amidst rising COVID...

Indian Oil Corporation consolidated net sales increased 90.82% to Rs 115502.51 crore in Q1FY22 compared to Q1FY21. Sales of Petroleum Products segment has gone up 74.83% to Rs 1,50,058.43 crore (accounting for 93.79% of total sales). Sales of Other Business Activities segment rose 92.40% to Rs 4,113.31 crore (accounting for 2.57% of total sales). Sales of...

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 (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...

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...

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...