1Q beat on strong GRM; maintain Buy

Research evidence excerpt

1Q beat on strong GRM; maintain Buy

Global Markets Research

Indian Oil Corporation IOC.NS IOCL IN 3 August 2026

EQUITY: INDIA ENERGY

Rating1Q beat on strong GRM; maintain Buy Remains Buy

Target priceIOCL adding ~25% refining capacity over next few Remains INR 180

months to aid strong earnings during refining upcycle

Closing price INR 140 31 July 2026Strong EBITDA beat in 1Q on higher-than-expected refining GRMs

IOCL’s 1QFY27 standalone EBITDA at INR19bn was sharply above our/Bloomberg Implied upside +28.6%consensus estimates of INR173bn/INR145bn EBITDA loss (Fig.1). We believe the beat

can be largely attributed to very strong refining margins of ~USD36/bbl vs our estimate of Market Cap (USD mn) 20,751.4

USD23.9/bbl. Reported net loss at INR27bn was significantly ahead of our/ consensus ADT (USD mn) 22.8

estimates of INR180bn/INR198bn loss.

We expect IOCL to significantly benefit from its upcoming refining capacity additions in

Relative performance chartPanipat, Gujarat and Barauni (Fig.3), adding ~17.3mtpa of refining capacity (+25%)

which could not be better timed as crack spreads remain strong owing to damaged

Russian refining capacity and export curbs from China. Management indicated that new

capacity may also benefit from higher distillate yield, resulting in higher realised margins.

LPG under recoveries may also see a sharp decline from 2Q onwards to

~INR250/cylinder vs ~INR524/cylinder implied in 1QFY27.

Capex intensity to remain high despite refinery capex cycle coming to an end

1QFY27 capex was at INR64.6bn while FY27 capex was guided at INR327bn (FY26:

INR283bn). Management reiterated annual capex guidance of INR300-400bn for the next

2-3 years as IOC is targeting a 9-10% share of India's primary energy basket. IOC is