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Prabhudas Lilladher Report
Indian Oil Corporation Ltd.'s Q2 Ebitda stood at Rs 213.1 billion (down 4% QoQ, our estimate: Rs 171.8 billion) and profit after tax at Rs 129.7 billion (down 6% QoQ, our estimate: Rs 96.4 billion).
The beat on estimates was driven by higher than expected refining margins. Refining capacity utilisation stood at 100.9%.
Going ahead, we anticipate Indian Oil's gross refining margins at $6/barrel of oil for FY25/26E and gross marketing margin at Rs 4.2/litre for FY25/26E.
The stock is currently trading at a price-to-book value of 0.8 times and enterprise value/Ebitda of four times, factoring in the softening Singapore GRMs and inability to pass on rise in fuel cost.
We maintain ‘Hold' rating with a target price of Rs 94 (previous target price Rs 97) based on 0.7 times FY26E P/BV.
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