Buy Indian Oil Corporation, target price Rs 130: ICICI Securities

ICICI Securities has buy call on Indian Oil Corporation with a target price of Rs 130. The current market price of Indian Oil Corporation is Rs 79.9.

Indian Oil Corporation, incorporated in the year 1959, is a Large Cap company (having a market cap of Rs 111910.81 Crore) operating in Gas & Petroleum sector.

Indian Oil Corporation 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 has 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 has reported net profit after tax of Rs -1156.88 Crore in latest quarter.

The company’s top management includes Mr.Shrikant Madhav Vaidya, Mr.Krishnan Sadagopan, Mr.Sudipta Kumar Ray, Mr.Prasenjit Biswas, Dr.Dattatreya Rao Sirpurker, Dr.Ashutosh Pant, Mr.Dilip Gogoi Lalung, Mr.Sujoy Choudhury, Ms.Sukla Mistry, Mr.D S Nanaware, Mr.V Satish Kum, Ms.Indrani Kaushal, Mr.Navneet Mohan Kothari, Ms.Lata Usendi, Mr.Sandeep Kumar Gupta, Mr.Ranjan Kumar Mohapatra, Dr.S S V Ramakumar, Mr.G K Satish, Prof. (Dr)Ram Naresh Singh. Company has V Singhi & Associates as its auditors. As on 30-09-2022, the company has a total of 1,412 Crore shares outstanding.

Investment Rationale
Volatility in international crude and product prices is likely to benefit OMC marketing earnings in Q3. Post record high losses of Rs17.4/ltr on petrol and Rs27.7/ltr diesel for the week ended 24th June2022, margins for petrol are estimated at a positive Rs10/ltr for Q3 while diesel losses too have likely narrowed to Rs6.5/ltr for the same quarter. Coupled with GRMs of US$10.5-12.4/bbl (net of windfall tax and estimated inventory loss), the brokerage believes operating earnings for the 3 companies will likely swing back to the blackpost the record loss seen in Q2.

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.