Sharekhan has given Buy on the stock with a revised price target recommendation for Indian Oil Corporation with a target price of Rs. ekhan is bullish on Indian Oil Corporation has recommended buy on the stock with a revised price target (PT) of Rs. 150 in its research report issued on Feb 02, 2022

Outlook

IOCL is the most attractively valued stock among oil marketing companies (OMCs) with valuation of 0.8x its FY2024E P/BV and 4.6x it’s FY2024E EPS and has a balanced earnings profile with steady contribution from the pipeline and petrochemical segments, besides refining & marketing. We expect IOCL’s steep valuation discount of 64% to that of BPCL on FY2024E EPS to narrow down, given recovery in core earnings, strong RoE of 19%, and a high dividend yield of 9%. Potential monetisation of non-core assets and likely successful privatisation of BPCL are expected to aid re-rating of the entire pack of OMCs. Hence, we maintain a Buy rating on IOCL with an unchanged PT of Rs. 150.

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