Mar'25 View on Indian Oil Corporation Ltd

Indian Oil Corporation Ltd is a Maharatna Company controlled by GOI that has business interests straddling the entire hydrocarbon value chain - from Refining, Pipeline transportation and marketing of Petroleum products to R&D, Exploration & production, marketing of natural gas and petrochemicals. It has the leadership position in the Oil refining & petroleum marketing sector of India. After making a high near 200 in Feb'24 the stock has shown weakness and is now consolidating at 130 level and in all likely hood will fall below 100 due to following inputs • IOC’s Q3 standalone EBITDA (down 54% yoy), was 54% below our estimates. • Miss is driven by weaker refining, marginally higher LPG losses and higher opex. • The petchem business again reported EBIT loss. • Q3 result also worst among OMCs. • Near-term headwinds on Russian crude, higher oil and weaker GRMs. • Apart from the lack of pricing power, OMCs’ rising capex is a worry for us. • For 9MFY29, despite it being over 2x size, IOC’s PBT (down 89% yoy), is lower than BPCL and HPCL. • Reiterate SELL with a revised FV of Rs90.