1Q: Inventory gains cushion loss; multiple projects nearing completion

Research evidence excerpt

Accessible version

Indian Oil Corporation Limited

1Q: Inventory gains cushion loss; multiple

projects nearing completion

Reiterate Rating: NEUTRAL | PO: 140.00 INR | Price: 139.99 INR

1Q: Inventory gains drive EBITDA beat

03 August 2026

Indian Oil (IOCL) reported a weak 1Q'FY27, with standalone EBITDA declining to

INR19.5bn (-91% QoQ, -85% YoY), though well ahead of BofAe of an INR225bn EBITDA

loss, primarily on finished-product inventory gains. The company posted a standalone

net loss of INR27bn, versus PAT of INR114bn in 4Q'FY26. Reported GRM was

US$15.6/bbl, versus US$2.2/bbl YoY and BofAe of US$6.0/bbl. Crude throughput fell 3%

QoQ (+3% YoY) to 19.2mmt, while domestic sales rose 9% QoQ (+13% YoY) to 25.3mmt

on strong petrol and diesel volumes, partly offset by a 16% YoY fall in LPG sales

volumes. We maintain Neutral, with IOCL better placed given its lower marketing-torefining mix relative to other OMCs.

Equity

LPG losses to narrow; Spot sourcing surges

Price

LPG under-recoveries eased from ~INR665/cylinder in Jun'26 to ~INR475 in Jul'26 and

should average ~INR250 in 2Q, subject to Saudi CP, with management confident of

government compensation (timing and quantum remain uncertain). Crude inventory

losses of ~US$3–4/bbl in 1Q were more than offset by ~INR150bn of finished-product

inventory gains. Spot crude purchases rose to 84% (from ~50% normally) as sourcing

diversified across Russia, Latin America and West Africa; crude landed cost peaked at

~$10/bbl premium over Brent before easing to ~$2–3/bbl over Brent in July.

Key projects enter the final leg of execution

2025A

135,947

9.87

-67.4%

2026A

420,961

30.56

209.7%

3.00

(0.376)

14.18x

2.14%

9.90x

-0.262%

Stock Data

8.25

34.69

2027E

(236,903)

(17.20)

NM

6.44

0

(27.45)

2028E

252,681

18.35

NM

20.15

6.00

13.21

2029E

375,501

27.26

48.6%

24.03

8.00

21.20

4.58x

5.89%

4.62x

24.17%

NM

0%

NM

-19.12%

7.63x

4.29%

6.17x

9.20%

5.13x

5.71%

4.75x

14.77%

* For full definitions of iQ method SM measures, see page 8.

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