Reduce Indian Oil, target price Rs 128: HDFC Securities

HDFC Securities has a Reduce call on Indian Oil Corporation with a target price of Rs 128. The current market price of Indian Oil is Rs 147.95. Indian Oil Corporation, incorporated in 1959, is a Large Cap company with a market cap of Rs 209785.12 crore, operating in the Gas & Petroleum sector.

Indian Oil’s key products/revenue segments include Petroleum Refinery Products, Other Operating Revenue, Scrap, Sale of services and Subsidy for the year ending 31-Mar-2024.

Financials
For the quarter ended 31-03-2025, the company has reported a Consolidated Total Income of Rs 196508.13 crore, up .75% from last quarter Total Income of Rs 195036.06 crore and down -1.80 % from last year same quarter Total Income of Rs 200103.28 crore. The company has reported net profit after tax of Rs 8088.01 crore in the 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, Prof. (Dr)Ashutosh Pant, Mr.Dilip Gogoi Lalung, Dr.Sujata Sharma, Mr.Arvind Kumar, Ms.Rashmi Govil, Mr.Alok Sharma, Mr.Anuj Jain, Mr.N Senthil Kumar, Mr.Sujoy Choudhury, Mr.Satish Kumar Vaduguri, Prof. (Dr)Ram Naresh Singh. The company has Komandoor & Co LLP as its auditors. As on 31-03-2025, the company has a total of 1,412 crore shares outstanding.

Investment Rationale
HDFC Securities has cut its FY26/26/27E EPS estimates by 18/28% to Rs 12.1/11.5, owing to lower refining and marketing margins assumption. The brokerage has revised its SOTP target price to Rs 128/share, based on 6x Jun-26E EV/EBITDA for standalone refining, petchem, marketing and pipeline businesses and Rs 33/share for other investments. The stock is currently trading at 11.9x Jun-26E EPS. HDFC Securities maintains REDUCE.

Promoter/FII Holdings
Promoters held 51.5 per cent stake in the company as of 31-Mar-2025, while FIIs owned 7.39 per cent, DIIs 9.96 per cent.