Indian Oil Q1 Results Review - Super Normal Marketing Margins Led The Show: Dolat Capital

Dolat Capital Report

Indian Oil Corporation Ltd.'s Ebitda Rs 222 billion (+1,531% YoY, 44% QoQ), 7% above our estimates. Sequential growth was due to-

1. more than doubling of auto fuel margins to ~Rs 13/litre; and

2. petrol/diesel volume increased by 8%/6%.

Net profit Rs 138 billion (+790% YoY, +37% QoQ), 11% above our estimates. Total debt declined to Rs 1,010 billion (-24% YoY, -7% QoQ), debt to Ebitda stood lowest in last five years.

Oil product sales volume was up only 1% QoQ and flat on YoY. Huge loss of market share of IOCL in petrol/diesel.

IOCL processed 35% Russian crude which has boosted gross refining margin to $9.1/barrel of oil but due to crude inventory losses, reported GRM of $8.3/bb.

Considering the record margins on auto fuel, we have increased our assumptions to Rs 6/litre (versus earlier Rs 3.5/litre) for FY24E, it has led to jump in earnings by 34%.

However, no change in FY25E assumptions. We maintain 'Accumulate' with SoTP based target price of Rs 106 (versus earlier Rs 102).

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.