Centrum Broking has add call on Indian Oil Corporation with a target price of Rs 78. The current market price of . is Rs 68.5.
Ltd., incorporated in the year 1959, is a Large Cap company (having a market cap of Rs 96659.88 Crore) operating in Gas & Petroleum sector.
Indian Oil Corporation Ltd. key Products/Revenue Segments include Petroleum Refinery Products, Other Operating Revenue, Scrap, Sale of services, Other Services and Subsidy for the year ending 31-Mar-2022.
Financials
For the quarter ended 30-09-2022, the company reported a Consolidated Total Income of Rs 233800.98 Crore, down -8.67 % from last quarter Total Income of Rs 256004.60 Crore and up 35.42 % from last year same quarter Total Income of Rs 172646.31 Crore. Company reported net profit after tax of Rs -1156.88 Crore in latest quarter.
Investment Rationale
Target Price for of Rs78/share is based on a SoTP valuation: a) Core business (Petchem + Refining + marketing + pipeline) at an EV of Rs146/sh based on ~6x forward EV/EBITDA; b) Investments at 25% discounts to CMP at an EV of Rs31/sh; and c) net debt of Rs99/sh. IOCL trades at 0.7x of Sept’24 P/BV available at cheapest valuation and offering dividend yield of 6%/7% in FY24/FY25. Thus, the brokerage reinitiates coverage on IOCL with “ADD” recommendation. Key risk 1) Rise in crude price; and 2) delay in recovery of petrochemical margins.
Promoter/FII Holdings
Promoters held 51.5 per cent stake in the company as of 30-Sep-2022, while FIIs owned 16.59 per cent, DIIs 11.23 per cent.
Ltd., incorporated in the year 1959, is a Large Cap company (having a market cap of Rs 96659.88 Crore) operating in Gas & Petroleum sector.
Indian Oil Corporation Ltd. key Products/Revenue Segments include Petroleum Refinery Products, Other Operating Revenue, Scrap, Sale of services, Other Services and Subsidy for the year ending 31-Mar-2022.
Financials
For the quarter ended 30-09-2022, the company reported a Consolidated Total Income of Rs 233800.98 Crore, down -8.67 % from last quarter Total Income of Rs 256004.60 Crore and up 35.42 % from last year same quarter Total Income of Rs 172646.31 Crore. Company reported net profit after tax of Rs -1156.88 Crore in latest quarter.
Investment Rationale
Target Price for of Rs78/share is based on a SoTP valuation: a) Core business (Petchem + Refining + marketing + pipeline) at an EV of Rs146/sh based on ~6x forward EV/EBITDA; b) Investments at 25% discounts to CMP at an EV of Rs31/sh; and c) net debt of Rs99/sh. IOCL trades at 0.7x of Sept’24 P/BV available at cheapest valuation and offering dividend yield of 6%/7% in FY24/FY25. Thus, the brokerage reinitiates coverage on IOCL with “ADD” recommendation. Key risk 1) Rise in crude price; and 2) delay in recovery of petrochemical margins.
Promoter/FII Holdings
Promoters held 51.5 per cent stake in the company as of 30-Sep-2022, while FIIs owned 16.59 per cent, DIIs 11.23 per cent.
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