State-run oil marketing major, Indian Oil Corporation reported a fall of 18.7 percent in its net profit for September quarter at Rs 3,696 crore against Rs 4,548 crore during the previous quarter. The number came in much lower than analysts’ expectations, according to a CNBC-TV18 poll, of Rs 6,023 crore. The revenue came in 13.7 percent lower at Rs 1.1 lakh crore against Rs 1.28 lakh crore quarter on quarter.
The company’s gross refining margins (GRMs) were reported at USD 6.08 per barrel against USD 7.1 barrel year on year.
Moneycontrol takes a look at the top research and broking houses’ outlook on the company:
Brokerage: Deutsche Bank | Rating: Buy | Target: Rs 530
Global research firm Deutsche Bank has reiterated a buy rating on Indian Oil Corporation on increase in refining segment contribution. It estimates marketing segment gross margin at Rs 8,280 crore in this quarter for IOC. It believes that throughput could have been higher by 11 percent but shutdowns at Panipat and Mathura were a drag. The house has set a target for the stock at Rs 530 per share.
Brokerage: Nomura | Rating: Buy | Target: Rs 495
The outlook from global research firm Nomura for IOC in both refining and marketing remains good but the gross refining margin is lower mainly due to refinery maintenance shutdowns, it said. The firm believes that the September quarter results were weak due to lower gross refinery margins, refinery maintenance shutdowns and lower inventory gains in marketing adding that the oil & gas firm was unable to take optimum advantage of strong refining margins environment.
Nomura expects improvement in coming quarters with return of refineries from maintenance shut-downs.
For the research firm, Indian Oil Corporation remains the favourite oil marketing entity with pecking order as Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation.
Brokerage: BofAML | Rating: Neutral | Target: Rs 442
BofAML, the global research firm has maintained a neutral rating on Indian Oil Corporation but has hiked price target of the stock to Rs 442 from Rs 428. The research firm believes that significant earnings miss on refining might be attributed to lower volumes and higher costs adding that the company continues to lose diesel market share.
The Paradip plant is slated for maintenance in the near term and Indian Oil should book further inventory gains in the present quarter, it said.
At 11:48 hrs Indian Oil Corporation was quoting at Rs 414.90, up Rs 0.70, or 0.17 percent. It has touched an intraday high of Rs 421.40 and an intraday low of Rs 414.