Indian Oil Corporation: Brokerage Firm Sees Target Price of Rs 145

Indian Oil Corporation Sees Sharp EBITDA and PAT Growth in Q4FY26

In its latest research report, Prabhudas Lilladher has highlighted the growth in refining throughput and domestic sales volumes for Indian Oil Corporation (IOC) in Q4FY26. Refining throughput increased marginally to 19.7 million metric tons (mmt) from 19.4mmt quarter-on-quarter (QoQ), while domestic sales volumes grew 6.0% year-over-year (YoY) to 23.3mmt.

The report also notes that management did not disclose Q4FY26 and FY26 Gross Refining Margins (GRMs) due to ongoing volatility arising from disruptions in West Asia. However, standalone Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) improved sharply to INR226.1 billion, significantly ahead of estimates. This represents a substantial increase from INR212.9 billion in Q3FY26 and INR137.1 billion in Q4FY25.

Moreover, standalone Profit After Tax (PAT) also rose sharply to INR113.8 billion, outperforming estimates and previous periods. The PAT for Q4FY26 is higher than INR121.3 billion in Q3FY26 and INR72.6 billion in Q4FY25.

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In terms of capital expenditure (capex), management has guided FY27 capex at INR327 billion, with approximately 50% allocated toward refining and pipeline projects. However, planned refinery shutdowns in FY27 are expected to limit throughput to approximately 75 million metric tons per annum (mmtpa). The recent price hikes of INR3.9/ltr implemented in May'26 are expected to provide some relief, but they remain insufficient to fully offset the under-recoveries in Motor Spirit (MS) and High-Speed Diesel (HSD).

Prabhudas Lilladher has revised its valuation multiple to 0.8x FY28E (from 0.9x) and maintained a "Accumulate" rating with a revised target price of INR145, down from INR163.

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