Indian Oil Corporations Ltd. on Friday approved an investment of Rs 657 crore for setting up a yarn project in Odisha. The project will be set up by the company's joint venture with chemical manufacturer MCPI Pvt.
The project, to be set up in Odisha's Bhadrak, will consist of "900 TPD continuous polymerization unit with downstream units of draw textured year, fully drawn yarn and polyester chip and other associated facilities", IOC said in an exchange filing.
The estimated cost for the project is Rs 4,382.21 crore, with Indian Oil's contribution of Rs 657.33 crore.
Meanwhile, Jefferies on Dec. 13 upgraded the the state-run oil marketing company's stock to 'buy' rating. The brokerage raised its price target to Rs 185.
IOCL has the most leverage among its peers to benefit from an improvement in refining margins, owing to its high refining-to-marketing ratio, the brokerage said.
The note also added that IOC's integrated margins are notably superior to those of Hindustan Petroleum Corp. and comparable to Bharat Petroleum Corp.
Jefferies noted that IOCL's risk-reward has turned favourable after a nearly 20% correction over the past three months, with the stock now trading at a steeper discount to the Nifty, compared to its long-term average.
Shares of IOC on Friday closed 1.72% lower at Rs 137.25 apiece on the BSE, compared to a 1.49% decline in the benchmark Sensex. The stock has risen 5.6% on a year-to-date basis, and by 14% over the past 12 months.
Out of 34 analysts tracking the company, 16 maintain a 'buy' rating, 7 recommend a 'hold,' and 11 suggest 'sell,' according to Bloomberg data. The average of 12-month analysts' price target implies a potential upside of 18.9%.
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