Invest in Indian Oil Corporation with a 105 rupee goal: Sharekhan

 Invest in Indian Oil Corporation with a 105 rupee goal: Sharekhan

In its research report dated October 02, 2023, Sharekhan expressed optimism about Indian Oil Corporation and suggested a buy recommendation for the stock, with a target price of Rs 105.

Sharekhan's Indian Oil Corporation study report

Due in large part to a higher-than-expected marketing margin, the standalone PAT of Rs. 12,967 crore exceeded our forecast. Although refinery throughput and marketing sales volume fell short of expectations, GRM remained steady at $8.3/bbl (in-line). Petchem's EBIT increased 85% from quarter to quarter to Rs. 163 crore. Following very impressive H1 results, OMCs will face a challenging earnings environment in H2FY24 due to the rising price of Brent crude oil and the decline in GRMs. To boost sentiment, the geopolitical risk premium in oil prices has to normalize.

Prospects

We maintain our buy recommendation at Rs. 105, unchanged, based on the stock's low valuation of 5.5x/0.9x FY25E EPS/BV and strong dividend yield of around 9%.

For the report with all suggestions, go here.

Khan, Indian Oil Corporation, 04-10-2023