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Dolat Capital Report
Indian Oil Corporation Ltd.'s Ebitda of Rs 213 billion (+987% YoY, -4% QoQ), 11% above our estimates. Ebitda growth on YoY was due to-
a sharp increase in gross marketing margins on auto fuel;
refinery throughput up 10%;
petrochemical Ebit turned positive; and
oil product sales up 1%.
IOCL's net profit Rs 130 billion (last traded price YoY, -6% QoQ), 15% above our estimates. Total debt declined to Rs 994 billion (-29% YoY, -2% QoQ), and debt to Ebitda was closer to the lowest level of last five years.
Dividend per share of Rs 5/share implies a yield of 5% on current market price.
Considering record gross refining margin, we have increased our assumptions to $10.5/barrel of oil (versus earlier $7.5/bbl) in FY24E, which has led to a jump in earnings by 48%.
However, we have marginally tweaked FY25E earnings. We maintain 'Accumulate' with a SoTP-based target price of Rs 110 (versus earlier Rs 106).
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