Buy IOC; target of Rs 198: Motilal Oswal

Motilal Oswal is bullish on IOC has recommended buy rating on the stock with a target price of Rs 198 in its research report dated May 20, 2019.

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June 11, 2019 / 04:14 PM IST

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Motilal Oswal's research report on IOC

4QFY19 EBITDA (adj. for inventory and one-offs) stood at INR74b (-10% YoY, -40% QoQ) due to lower-than-expected core GRM and refining throughput. EBITDA was ~45% above our estimate, primarily led by better marketing performance. PAT was 63% above our estimate at INR61b (+17% YoY), owing to higher other income and lower tax rate. Interest cost was higher at INR12.4b (-5% YoY, +47% QoQ). Forex gain was at INR8.4b (v/s loss of INR6.8b in 4QFY18 and gain of INR21b in 3QFY19). Total inventory gain stood at INR26b in 4QFY19 (our est. INR25b).

Outlook

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.

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