India Oil, BPCL, Marico, Godrej Properties, Home First Finance, Nuvoco Vistas Q4 Review - HDFC Securities

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HDFC Securities Institutional Equities

Indian Oil - Petchem drags earnings down

Our Reduce rating on Indian Oil Corporation Ltd. with a target price of Rs 128 is premised on margin pressure due to increasing petchem supplies/capacity, lower refining margins, and moderation in auto fuel marketing margins. IOCL’s Q4 FY25 reported Ebitda at Rs 136 billion (+30% YoY, +90.7% QoQ) and adjusted profit after tax at Rs 73 billion (+50% YoY, +1.5x QoQ) came in above our estimates due to higher-than-expected gross refining margins. Reported gross refining margins came in at $7.9/barrel of oil (-6.4% YoY, +166.1% QoQ). IOCL’s gross debt increased to Rs 1,345 billion (+15.4% YoY, +2.3% QoQ).

Marico - Well-oiled for growth in medium term

Marico Ltd.'s Q4 FY25 results were ahead of our estimates, with domestic volume growth of 7% versus our expectations of 4-5%, higher owing to solid offtake in foods and digital first brands. However, profitability remained strained, given the inflation in key raw material and high advertising costs. We maintain our Buy rating on Marico with a target price of Rs 785/share (50x its FY27 consolidated EPS, 22% premium to its five-year average PE), with revenue/Ebitda/PAT CAGRs of 9/11/11% for FY25-FY28E.

In our view, the growth will be driven by-

1. strong performance of the domestic business led by Parachute (estimating MSD volume growth), Saffola edible oil (price hike led growth), VAHO (easing competitive intensity), and improving profitability of the foods and digital-first business and

2. sustained double-digit CCG momentum in the international business (reported numbers to improve as currency headwinds subside).

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