3 IOC share price target reports by brokerages below. See what is analyst's view on IOC share price forecast, rating, estimates, valuation and prediction behind the target. You may use these research report forecasts for long-term to medium term for your investment or trades in 2020.
We maintain our FY21/22 earnings estimates. In Q1FY21, core standalone EBIDTA adjusted for inventory and forex loss was healthy at Rs86.2bn (+35%YoY) despite lower refining margins (-$1.98/bbl vs $4.7/bbl in Q1FY20). Weak global demand and high inventory levels to likely keep crude oil prices range bound, which will support marketing margins in medium term. GRMs will recover with pickup in economic activity, and lower operating cost (due to soft spot LNG prices) will support refining earnings. Maintain BUY with a PT of Rs114.
The company is paying double digit dividend, is also delivering strong performance and over the top, is available at corrected levels which could give advantage to invest at lower levels. we recommend to buy the stock at current levels for the price target of `107 in medium term.
We maintain Buy on IOC and upgrade BPCL and HPCL from Accumulate to Buy following revised earnings and TP, which we have rolled over to FY22E. We see PSU refining majors (OMCs) delivering double-digit returns in the next 6-12 months based on the upside leverage to marketing margins under low oil prices below US$40-50/bbl. We believe that these stocks are poised to enter the blue sky phase last seen during FY14-17, when the steep fall in oil price from US$107 to US$47-50/bbl boosted marketing margins and earnings for the OMCs. As a result, IOC and BPCL delivered compounded returns of 39% and 40%, respectively while HPCL’s stock price witnessed a CAGR of 70% over April 2014-March 2017. This is likely to offset the risk to earnings from pressure on GRMs (tough to predict), inventory losses and the hit on refining and marketing volume (due to the COVID19 lockdown). We have raised earnings for the OMC trio assuming about 10% hit on volume in 1QFY21, weak GRMs and Rs3/lit upside in retail margins in FY21. These are subject to change as and when we get official confirmation on the lockdown impact. The INR/USD depreciation, while negative for MTM impact in fx loans, is overall a tailwind assuming that the combined spread in refining and marketing remains +ve. We have raised our TP for HPCL by 43.9% to Rs353 and for IOC a tad to Rs137. We are cutting the TP for BPCL by 22.6% to Rs414 based on our reduced target multiple - from 10.9x (10% premium to SD+1 on 5 year median) to 6.1x (SD-1), as the stake sale tailwind is likely to wane until the COVID-19 related uncertainty ends.
We are upgrading Indian Oil Corp (IOC) from Accumulate to Buy based on our reduced TP of Rs136, which offers 24.5% upside from CMP. We are cutting earnings – 13.5%/24.4%/3.87% for FY20, FY21E and FY22E, respectively after the 3QFY20 results con-call based on (a)YTD decline in Consolidated PAT of 39.4% and b) the weak pricing outlook for refining and petrochemicals, which is likely to get moderated by (i) a possible hike in BHVI MS and HSD prices (+Rs 1/lit each from April ) and (b) the upside in petrochemical volumes based on the ramp up in PTA, and the new twin-train 0.68mn tpa polypropylene (PP)project at Paradip. Our buy call is based on: (i) the sharp 20.6%/23.7% fall in the stock price in the last 3 months/one year has priced in worries over weak fundamentals and likely risk of increasing competition from private retailers and alternative fuels ii) refining and petchem margins are at trough levels and could revive over the next 1-2 years based on likely closure of capacities iii) We also see prospects of 27.4% EPS CAGR that will support RoE expansion over FY21-22E iv) the stock is trading at 0.76x its book value vs. FY22E RoE of 12.7%, and FCF/Dividend yield of 8.28/7.34%. IOC’s 3QFY20 result was a marginal miss vs. street and NBIE estimates, although PAT was up 226% YoY. GRMs reported, including inventory gains of Rs18bn, came in at US$4.09/bbl. Normal GRMs have come in at US$2.04/bbl, vs. our GRM estimate of US$1.75/bbl. Standalone PAT came in at Rs23.3bn vs. street estimate of Rs27bn and NBIE estimate of Rs24.5bn. The company also sees volume growth from FY21 once train-II of the new PP unit starts operations.
We lower our FY20-22 earnings estimates to factor in lower refining margins. During Q3, core performance for IOCL was weak due to weak refining performance. While benign crude oil prices is likely to support marketing margins in medium term, refining scenario has worsened with muted demand and lower than expected diesel demand post change in marine fuel norms. Maintain BUY with a revised PT of Rs145 (Rs190 earlier).
The company expects demand of petroleum products to increase post monsoon and crude oil prices to remain stable in coming quarters. We also expect inventory losses to partly normalize in the near-term along with improvement GRM post IMO. We expect the earnings to grow by 3.8% CAGR over FY19-21E and raise our rating on the stock to a BUY with a revised target price of Rs. 148 using SOTP valuation methodology wherein we value IOCL at 5.8x FY21E EV/EBITDA.
We have raised Indian Oil Corp’s (IOC) target price (TP) by 18.8% to Rs147 based on revised FY20E-FY21E and new FY22E and upgrade the rating from Sell to Accumulate as we believe that the poor 2QFY20 results are priced in, considering that it is down nearly 10% in the last six months. The stock is likely to find support at CMP as it is trading at close to its book value and offers dividend yield of 5%. We also see prospects of 21% EPS CAGR over FY21-22E on the beaten down base in FY20E after our sharp 29% cut in FY20E following the steep 83%/58% decline in 2QFY20/1HFY20 PAT.IOC’s2QFY20 result was a big missvs. street and NBIE estimates as GRMs crashed to US$1.28/bbl vs. our estimate of US$6.69/bbl. This was due to inventory loss of Rs11.78bn and fx loss of Rs11.35bn – which we did not consider in our 2QFY20E (as these are difficult to estimate). Normal GRMs have come in at US$3.99/bbl, which is comparable with our GRM estimate. Standalone PAT came in at Rs5.63bn vs. street estimate of Rs37bn and NBIE estimate of Rs55.8bn. Going forward, management is banking on normalized GRMs based on likely improvement in spreads and higher petrochemical earnings from one of the twin-train new polypropylene (PP) units that started operations last quarter. Management is also hopeful of capping gross debt at current levels of Rs800bn barring any setbacks or increase in LPG/SKO subsidy dues from the government.
We are neutral on IOC at the current juncture given the volatility in global GRMs and uncertainty on the company’s ability to pass on costs to customers during high oil prices. IOC’s marketing margins and trend in refining margins will determine its near term performance. We have a HOLD recommendation on the stock with a target price of | 160 (based on average of P/BV multiple: Rs 152/share and P/E multiple: Rs 168/share).
We lower our FY20E earnings estimates to factor in lower than expected H1 performance. During Q2, core performance for IOCL was weak; however, we expect operational performance to improve going forward. Benign crude price outlook given rising US supplies and weak global macros is likely to keep marketing margins buoyant. Also, implementation of IMO2020 will support diesel margins, which is positive for the OMCs. Maintain BUY with a revised PT of Rs209 (Rs181 earlier) on roll over to FY21E.
With GRMs doubling QoQ to over USD7/bbl, we expect GRMs to have bottomed in Q1. Refining/petchem will be the key earnings driver in the future. With IOCL trading at an inexpensive 4.8x FY21E EV/EBITDA, we maintain ‘BUY’ with a TP of INR174/share.
We are neutral on IOC at the current juncture given the volatility in global GRMs and uncertainty on the company’s ability to pass on costs to customers during high oil prices. IOC’s marketing margins and trend in refining margins will determine it’s near term performance. We have a HOLD recommendation on the stock with a target price of Rs 150.
Reported net profit for 1QFY20 at Rs35.96bn is higher than our estimate of Rs31.74bn. If we adjust for the write-back of Rs6.3bn in revenue (related to old sales tax/VAT disputes in Maharashtra),adjusted net profit for 1QFY20 at Rs31.86bn is broadly in line with our estimate of Rs31.74bn. Adjusted EBITDA came in at Rs77.3bn vs. our estimate of Rs72bn (+7.4%). On a YoY basis, the standalone adjusted EBITDA is down 39% at Rs77.2bn and PAT is down 53% YoY at Rs31.9bn (net of the above tax write-back). We maintain Sell with TP of Rs112 (based on 7.2x FY21E PE assuming 10% discount to 5 year median).
We cut our FY20/21E earnings by 10/11% respectively to update cost post annual report updation, appreciating exchange rate (INR/USD of 70/72.1 vs 72.6/74.8 for FY20/21) and other changes. During Q1, core performance for IOCL was muted, however, with marketing and refining margins higher than Q1 levels, we expect operational performance to improve going forward. Benign crude price outlook given rising US supplies and weak global macros is likely to keep marketing margins buoyant. Also, implementation of IMO2020 will support diesel margins which is positive for OMCs. Meanwhile, government’s move to redefine holdings eligible for stake sale is a dampener. Maintain BUY.
With respect to refining, we maintain a modest outlook and believe rising US production along with potential production increase by OPEC could keep crude price levels below $78-80/bbl hence supporting operational performance to some extent. We expect revenues to grow at a CAGR of 8.6% over FY19-21E and EBITDA to grow at a CAGR of 9.0% over FY19-21E. At a CMP of INR 157, IOC is trading at 6.1x FY20E EV/EBITDA and 5.7x FY21E EV/EBITDA. We maintain our EV/EBITDA-based multiple target price of INR 185 (potential upside – 17.8% ). We maintain BUY rating on the stock.
We are structurally positive on IOC, owing to its diversified business model, and healthy free cash flows (Rs 285bn) over FY20-21E. Our SOTP based target price of Rs 190 (5x Mar 21E EV/e for standalone refining, pipeline, petchem and 5.5x Mar 21E EV/e marketing and Rs 31/sh from other investments).
IOCL is commissioning polypropylene plant at Paradip; it has already commissioned 5mmtpa Ennore LNG terminal. With reduced future capex, our estimate suggests that free cash flow generation over FY20/FY21 would be at INR10.2 per share/INR11.5 per Standalone - Quarterly Earning Model share, with dividend yield appearing attractive at ~5%. IOCL is trading at 8.4x consol. FY20E EPS of INR18.7 and 1.2x FY20E PBV. We value IOCL at 1.4x FY21 PBV. We reiterate Buy with a target price of INR198.
We are neutral on IOC at the current juncture given the volatility in oil prices and intention of the new government to pass on costs to consumers when oil prices are high. IOC’s ability to maintain normal marketing margins and trend in refining margins will determine its near term performance. We have a HOLD recommendation on the stock with a target price of Rs 170 (based on average of P/BV multiple: Rs 164/share and P/E multiple: Rs 176/share).
We have Sell rating on IOCL with a target price of Rs112: Given our concerns on the increase in capex over the next five years, rise in interest costs and also concerns over product pricing freedom, we expect the upside in earnings to be capped. We believe that with likely low earnings growth and a decline in RoE and RoCE, the stock will get de-rated. We have retained Sell rating on IOCL with a target price of Rs112 based on FY21E SOTP valuation. We will be revising our estimates shortly.
We maintain our FY20/21E earnings. During Q4, core performance for IOCL improved led by better marketing performance. Benign crude price outlook given rising US supplies and weak global macros is likely to keep marketing margins buoyant. Oil prices likely to remain benign, as rising US supplies cushions the impact of supply disruptions of over 3mbpd. Weak global macros and US-China trade dispute will prevent crude prices flare-up. Also, completion of Central elections is likely to ease policy overhang. Maintain ACCUMULATE.
We upgrade oil marketing companies (OMC’s) to BUY as we look beyond May 2019, wherein two important factors that determine the fortunes of OMCs gets settled-1) Central elections and uncertainties of policy overhang 2) clarity on Iran sanctions, which will determine trends in international crude oil prices. We believe that the risk-reward for the OMCs are favorable as US-China trade discord and weakening global economy will prevent any sharp rise in crude prices. Post Central elections, risk of government intervention on marketing margins is also likely to come down significantly. As a result, we increase our marketing margin assumptions (from Rs1.75 to Rs2.8/litre for FY20E) and target multiples to 10x PER FY20E against 8x earlier. BPCL/HPCL are top picks.
IOC Share Price Target Today- Technical Pivot Points (Classic)
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Upside Target 3
93.15
Upside Target 2
92.15
Upside Target 1
91.15
Pivot
90.15
Downside Target 1
89.15
Downside Target 2
88.15
Downside Target 3
87.15
IOC Share Price Target weekly- Technical Pivot Points (Classic)
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Upside Target 3
96.35
Upside Target 2
93.75
Upside Target 1
91.95
Pivot
89.35
Downside Target 1
87.55
Downside Target 2
84.95
Downside Target 3
83.15
IOC Share Price Target monthly- Technical Pivot Points (Classic)
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Upside Target 3
116.1
Upside Target 2
110.55
Upside Target 1
101.2
Pivot
95.65
Downside Target 1
86.3
Downside Target 2
80.75
Downside Target 3
71.4
IOC Share Price Target today- Technical Pivot Points (Fibonacci)
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Upside Target 3
92.15
Upside Target 2
91.39
Upside Target 1
90.91
Pivot
90.15
Downside Target 1
89.39
Downside Target 2
88.91
Downside Target 3
88.15
IOC Share Price Target weekly- Technical Pivot Points (Fibonacci)
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Upside Target 3
93.75
Upside Target 2
92.07
Upside Target 1
91.03
Pivot
89.35
Downside Target 1
87.67
Downside Target 2
86.63
Downside Target 3
84.95
IOC Share Price Target monthly- Technical Pivot Points (Fibonacci)
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Upside Target 3
110.55
Upside Target 2
104.86
Upside Target 1
101.34
Pivot
95.65
Downside Target 1
89.96
Downside Target 2
86.44
Downside Target 3
80.75
IOC Peer Stocks - Share Price Targets
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SOURCE: Data from D'Market via Quandl. Intraday data delayed 15 minutes.
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