Shares of Indian Oil Corporation Limited (IOCL) rose 3 per cent to Rs 145 in morning trade on December 13. The stock markets snapped their two-day losing streak after Jefferies upgraded the stock to buy and raised the target price citing strong future growth prospects.
With a target price of Rs 185, the international brokerage has projected an upside potential of over 31 per cent from the last closing price of Rs 141 on the National Stock Exchange. Shares of IOCL have declined 18 per cent in the last three months. The previous target price by Jefferies was Rs 165.
Jefferies has suggested a favourable risk-reward balance after the steep correction in the last three months. The brokerage expects refining margins to strengthen in the year 2025 due to capacity closures and strong demand. Among the oil marketing companies (OMCs), Indian Oil stands out for its high refining-to-marketing ratio, making it the most leveraged for improving refining margins.
In the second quarter, the state-run oil refiner reported a net profit of Rs 180 crore, including a one-time gain of Rs 1,157.3 crore resulting from a favourable Supreme Court order in August 2024.
Revenue for the quarter for Indian Oil Corporation stood at Rs 1.74 lakh crore. On a sequential basis, Indian Oil’s revenue declined 10 per cent. Indian Oil’s earnings before interest, tax, depreciation and amortisation (EBITDA) more than halved, falling 56 per cent to Rs 3,773 crore from the June quarter. EBITDA margin for the quarter narrowed 230 basis points from June to 2.2 per cent.
At around 9:20 am, the company’s shares were trading at Rs 143 on the NSE, up 1.4 per cent from its previous close price.
