Prabhudas Lilladher has given Accumulate recommendation for Indian Oil Corporation with a target price of Rs. 131 in its research report issued on May 17, 2022

Prabhudas Lilladher’s research report on Indian Oil Corporation

We cut our FY23E IOCL’s earnings estimate by 45% as we cut our marketing assumptions (diesel and petrol margins of –Rs3/0/litre vs +Rs3.5/3/litre earlier), even as we increase our GRM estimates to USD14/bbl vs USD7.4bbl earlier. We also lower our FY24E estimates by 19%. IOCL reported lower than expected Q4 results with standalone EBITDA of Rs116.3bn (+24%QoQ; PLe Rs 1860bn) and PAT of Rs60.2bn (+3%QoQ; PLe Rs120bn), due to lower than expected marketing earnings as calculated marketing EBIDTA loss increased to Rs54.8bn in Q4 vis-à-vis loss of Rs3.9bn in Q3. For FY22, consolidated EBIDTA/PAT was at Rs477bn (+18%YoY) and Rs257bn (+18%YoY). We believe OMCs earnings will be hit by sharp jump in marketing losses, despite improvement in refining profitability.


We downgrade to ‘’HOLD from ‘BUY’ given high crude price volatility with PT of Rs131 (Rs150 earlier). Any sharp correction in crude prices is an upside risk to our estimates.

Leave a Reply

Your email address will not be published. Required fields are marked *