Indian Oil Q4 Results Review - Strong Gross Refining Margin; Rising Marketing Margins: Dolat Capital

Dolat Capital Report

Indian Oil Corporation Ltd.'s gross profit was up 3% YoY and 56% QoQ to Rs 276 billion. Sequential growth was due to-

1. auto fuel margins of Rs 6.2/litre (versus Rs 1.8/litre in Q3);

2. a rise in gross refining margin with the support of 23% mix of Russian disc. crude;

3. refinery throughput was up 5%; and

4. sharp improvement in petrochemical margins and volume. 

Ebitda was up 32% YoY and 327% QoQ to Rs 153 billion which was 29% above consensus. Profit after tax was up 67% YoY and 2,145% QoQ to Rs 101 billion, much ahead of consensus.

Total debt has been reduced by 9% QoQ. The company announced a dividend of Rs 3/share (implies 3% yield).

IOCL trades at ~0.8 timesof FY25 price/book value available at a cheaper valuation and offering a dividend yield of 6%/7% in FY24/FY25.

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