Indian Oil Corporation share price: 3 key reasons why Jefferies expects 16% upside for the stock
Indian Oil Corporation share price: Indian Oil Corporation reported a good Q4 Results performance. Jefferies India Private Ltd maintained positive outlook post Q4 results for Indian Oil Corporation, maintaining Buy ratings and target price for Indian Oil Corporation share price.
3 key reasons why Jefferies expects 16% upside for the stock
1.Better than expected operating performance – The better-than-expected refining and marketing margins meant that at around ₹13500 crore (up 29% year over year and 91% quarter over quarter), Q4 earnings before interest tax depreciation and amortization were 81% higher than Jefferies estimates
2.Strong Marketing Margins- Despite losses of ₹5600 crore on liquid petroleum gas, the Q4 marketing profitability exceeded Jefferies’ estimates with average marketing margins for Petrol and diesel being ₹5.9 and 9.6 per liter, respectively. In 1QFY26 with declining crude prices, margins on diesel and petrol have increased even further, but there are chances of hike in excise duty
3.Margin estimates revised upward
Jefferies has raise estimates, maintaining a Buy ratings. Jefferies said that they have raised FY26 and 27estimated Ebitda 15% and 17%, respectively, as they are build inflated marketing margins under a benign crude price assumption.
Jefferies says that with crude down by 10 a liter in April, inventory losses are likely in the first quarter. Government has not compensated for Liquid Petroleum Gas losses in FY25. Though refining profitability has weakened, marketing margins have expanded sharply.
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Jefferies maintaining Buy ratings has also maintained the target price of Indian Oil Corporation share price at ₹160, which is at 1.2 times 1 year price to book value. Rise in crude price and any increase in excise duty on auto fuels are key risks.
Indian Oil Corporation share price had closed at near ₹137.25 on the NSE on Wednesday (Thursday being a stock market holiday). Thus the target price for Indian Oil Corporation share price given by Jefferies implies a n upside of around 16% for the Indian Oil share price.
