Indian Oil Corporation First Take: 4QFY26 - Inventory gains drive the beat

Research evidence excerpt

Indian Oil Corporation First Take: 4QFY26 - Inventory gains drive the beat

J P M O R G A N Asia Pacific Equity Research

19 May 2026

Indian Oil Corporation Overweight

IOC.NS, IOCL IN

First Take: 4QFY26 - Inventory gains drive the beat Price (18 May 26):Rs131.81

Price Target (Mar-27):Rs200.00

Our First Take: IOCL’s 4QFY26 PAT of Rs.114bn was up 57% YoY though down

6% QoQ, beating our expectations of a loss-making quarter. EBITDA of Rs.207bn

was flat QoQ, but up 53% YoY. This was despite a large impairment loss of

c.Rs189bn. This number is in line with HPCL’s result and it is likely that IOCL also

benefitted from (1) material inventory gains, (2) some degree of lagged crude

pricing and (3) strong refining margins. IOCL also received c.Rs36bn in lieu of

LPG underrecoveries. Head of India Research

Sanjay Mookim AC

Indian Oil’s petrochemical segment reported strong EBIT during the quarter of (91-22) 6157-3600

Rs12bn - an improvement over the losses it booked last quarter. Refining sanjay.mookim@jpmorgan.com

throughput and product sales remained steady QoQ. Atishy Rathi, CFA

(9122) 6157-3589

Going forward, IOCL could face headwinds, especially on marketing. The recent atishy.rathi@jpmchase.com

retail petrol/diesel price hike may provide little relief from the overall drag on J.P. Morgan India Private Limited, J.P. Morgan Tower, Santacruz(E), Mumbai - 400098, SEBI

earnings. Petchem segment may help to mitigate some of the losses in marketing. Registration: INH000001873, (91-22) 6157-3000.

Key Positives

Strong 4Q results supported by material inventory gains, strong refining margins

and petchem performance. Interest costs were lower than expected while other

income was better than anticipated.

Key Negatives/Question Marks

Higher impairment costs drove up operating expenses.