Indian Oil Corporation (IOC) shares gained 2% after HSBC reaffirmed its ‘buy’ stance on Indian oil marketing companies (OMCs). As of 10:25 AM, the shares were trading 1.72% higher at Rs 123.68.
The brokerage highlighted that the recent sharp correction in these stocks has made them trade below their historic mean valuations, presenting a strong buying opportunity.
Despite short-term concerns, HSBC remains optimistic about IOC’s fundamentals. While factors like weakness in the Indian rupee and declining gross refining margins (GRMs) pose challenges, the overall outlook remains positive. The firm believes that lower crude oil prices, robust demand for auto fuels, and limited government intervention in pricing will support profitability in the coming months.
IOC, one of India’s leading OMCs, is well-positioned to benefit from favorable market conditions. The ongoing recovery in fuel consumption, coupled with stability in crude oil prices, enhances earnings visibility. HSBC’s analysis suggests that the business fundamentals remain intact, making the stock an attractive investment at current levels.
The brokerage has set a target price of ₹170 for IOC, indicating a potential upside from its current trading levels.
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