Deutsche Bank, Nomura bullish on IOC shares after strong Q2 earnings – Financial Express


IOC shares were trading at Rs 416 on NSE this morning, up by more nearly 0.3% since the previous close. (Image: Reuters)

Global research and brokerage firms Deutsche Bank and Nomura have reiterated their bullishness on the shares of Indian Oil Corporation Ltd (IOC), after the company reported a near 19% rise in net profit for the Jul-Sep 2017 quarter. IOC on Friday reported an 18.4 per cent year-on-year (YoY) rise in net profit at Rs 3,696.29 crore for the quarter ended September 30. The refiner had reported a net profit of Rs 3,121.89 crore in the corresponding quarter last year.

On the strong profits Nomura said that IOC remains their favourite in the OMC (Oil Marketing Company) space. After IOC, Nomura is also bullish on BPCL and HPCL respectively. IOC’s Gross refining margin (GRM) for the quarter fell to $6.08 per barrel from $7.19 per barrel in the same quarter last year. However, Nomura said that outlook in refining looks bright for IOC, and maintained buy on the shares with a target price of Rs 495, as against the previous target of Rs 413. IOC shares were trading at Rs 416 on NSE this morning, up by more nearly 0.3% since the previous close.

Nomura’s target price implies an upside of more than 19% from the current market prices. On similar lines, Deutsche Bank has retained a buy on the shares with a target price of Rs 530, implying an upside of more than 27%. The global bank has also estimated the marketing segment gross revenue at Rs 8,280 crore in the December quarter.

IOC said that its dispute with the Odisha government on interest free loan agreement was resolved during the quarter. IOC, which had on October 13 announced the revised pay and allowances of employees, said it has provided for estimate liability on the account. The pay revision implementation is in process and the company does not anticipate any major change in liability on this account. According to Deutsche Bank, the throughput could have been higher by 11%, had the shutdown in Panipat and Mathura plant not occurred during the quarter.

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