Citi has reiterated its Buy rating on Indian Oil Corporation (IOC) but lowered the target price to ₹190, representing a potential upside of 30% from the current market price of ₹145.74. IOC reported a Q2 EBITDA of ₹38 billion, down 56% quarter-over-quarter, falling short of Citi’s ₹99 billion estimate. The disappointing performance was driven by weak refining margins, large inventory losses, and ongoing LPG under-recoveries, challenges similarly faced by other industry peers.
The company’s reported net income for Q2 stood at ₹1.8 billion, a 93% decline quarter-over-quarter, compared to Citi’s ₹37 billion estimate. This figure included a ₹12 billion exceptional gain that partially offset the decline. In response, Citi has lowered its FY25 and FY26 EBITDA estimates by 11% and 7%, respectively, to incorporate IOC’s weaker first-half performance. However, Citi anticipates a sharp recovery in key underlying factors in the second half of the fiscal year.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investors are advised to perform their due diligence before making investment decisions.
