Indian Oil Corp Stock: Target Cut But 'Accumulate' Rating Kept

ENERGY
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AuthorAarav Shah|Published at:
Indian Oil Corp Stock: Target Cut But 'Accumulate' Rating Kept
Overview

Prabhudas Lilladher kept an 'Accumulate' rating for Indian Oil Corporation (IOC) but lowered its price target to ₹145 from ₹163. The brokerage noted strong standalone EBITDA and PAT, even with oil price swings from West Asia. IOC also saw growth in refining and domestic sales.

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Prabhudas Lilladher has reaffirmed its 'Accumulate' rating for Indian Oil Corporation (IOC). However, the brokerage has reduced its price target for the stock to ₹145, down from ₹163.

IOC's refining throughput saw a modest increase, reaching 19.7 million metric tons (mmt) this quarter compared to the previous one. Domestic sales volumes also climbed by 6.0% year-on-year, totaling 23.3 mmt.

Stronger Earnings Reported

Indian Oil Corporation reported standalone EBITDA of ₹226.1 billion, which beat expectations. This figure is up from ₹212.9 billion last quarter and ₹137.1 billion in the same period last year. Standalone Profit After Tax (PAT) also rose to ₹113.8 billion, exceeding analyst forecasts. These gains were achieved while the company withheld its fourth-quarter and full-year fiscal year 2026 Gross Refining Margins (GRMs) due to market instability linked to West Asia.

Future Investment and Pricing

Looking ahead to fiscal year 2027 (FY27), Indian Oil Corporation plans a capital expenditure of ₹327 billion. About half of this amount will be invested in refining and pipeline projects. The company expects planned refinery shutdowns in FY27 to reduce throughput to approximately 75 mmtpa.

To address rising costs, a price increase of ₹3.9 per liter for petrol and diesel was implemented in May 2026. This adjustment may provide some financial relief, but if disruptions in West Asia persist, it might not fully offset losses, potentially requiring further price hikes.

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