Indian Oil, TVS Motor, SRF, Mahindra Finance, TTK Prestige, CreditAccess, Go Digit Q2 Review— HDFC Securities

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HDFC Securities Institutional Equities

Indian Oil Corporation - Marketing and refining margins disappoint

Our Reduce rating on Indian Oil Corporation Ltd. with a target price of Rs 150 is premised on margin pressure due to increasing petchem supplies/capacity and moderation in auto fuel marketing margins. IOCL’s Q2 FY26 reported Ebitda at Rs 146 billion (+286.6% YoY, +15.7% QoQ) and adjusted profit after tax at Rs 76 billion (+41.2x YoY, +33.8% QoQ) came in below our estimates due to lower-than-expected refining margin and marketing volumes.

Reported GRMs came in at $10.66/bbl (+5.7x YoY, +3.9x QoQ). IOCL’s gross debt increased sequentially to Rs 1,282 billion (-10.2% YoY, +5.5% QoQ).

TVS Motor - Margin expansion continues to impress

TVS Motor Company Ltd.’s Q2 FY26 Ebitda margin came in at 12.7%, including the PLI benefits of ~0.5%. This was in line with ours and Bloomberg consensus estimate of 12.8%.

Going forward, management expects the company to grow faster than the industry in both domestic and international markets, to be aided by the continuing scooterization and premiumization trends.

It has guided for the twi-wheeler ICE industry to grow 8% in H2, aided by GST rate rationalization. Rare earth magnet shortage continues to impact EV production.

Another concern remains on capital allocation, as higher investments continue toward its subsidiaries, which include investments for development of the Norton bike portfolio as well as e-bikes.

We value the company’s core business at 34 times Sep-27 EPS, leading to a target price of Rs 3,522, and maintain Add.

SRF - Volume-driven growth in chemical business

We retain Add on SRF, with a target price of Rs 3,285, on the back of-

1. strong demand outlook for refrigerants in domestic and export markets,

2. healthy traction in newly-launched products and demand pick-up for key agrochemical intermediates in specialty chemical business, and

3. rising share of valueadded products in Packaging Film Business.

Ebitda was 4% below our estimates while APAT was in line with our estimates.

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