Indian Oil (NSEI:IOC) - Share price, News & Analysis

Q: What is the Fair Price of IOC when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

IOC (₹73.2) is trading below our estimate of [[fair value]] (₹106.12)

IOC fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	0/6
Past Performance	3/6
Financial Health	2/6
Dividends	4/6

IOC Stock Overview

Indian Oil Corporation Limited, together with its subsidiaries, engages in the refining, pipeline transportation, and marketing of petroleum products in India.

Rewards

Trading at 31% below our estimate of its fair value

Earnings have grown 0.5% per year over the past 5 years

Risk Analysis

Earnings are forecast to decline by an average of 12.5% per year for the next 3 years

Debt is not well covered by operating cash flow

Dividend of 17.21% is not well covered by earnings

Indian Oil Competitors

Bharat Petroleum

NSEI:BPCL

₹686.4b

Hindustan Petroleum

NSEI:HINDPETRO

₹294.1b

Mangalore Refinery and Petrochemicals

BSE:500109

₹163.1b

Reliance Industries

NSEI:RELIANCE

₹16.4t

Price History & Performance

Summary of all time highs, changes and price drops for Indian Oil
Historical stock prices
Current Share Price	₹73.20
52 Week High	₹94.33
52 Week Low	₹67.70
Beta	0.72
1 Month Change	-5.43%
3 Month Change	-7.69%
1 Year Change	1.76%
3 Year Change	-29.68%
5 Year Change	-43.07%
Change since IPO	277.00%

Recent News & Updates

Jun 24

Indian Oil (NSE:IOC) Takes On Some Risk With Its Use Of Debt

Legendary fund manager Li Lu (who Charlie Munger backed) once said, 'The biggest investment risk is not the volatility...

Jun 02

Indian Oil Corporation Limited's (NSE:IOC) Intrinsic Value Is Potentially 18% Below Its Share Price

Does the June share price for Indian Oil Corporation Limited ( NSE:IOC ) reflect what it's really worth? Today, we will...

Shareholder Returns

	IOC	IN Oil and Gas	IN Market
7D	4.0%	4.2%	3.0%
1Y	1.8%	18.6%	0.3%

Return vs Industry: IOC underperformed the Indian Oil and Gas industry which returned 16.9% over the past year.

Return vs Market: IOC exceeded the Indian Market which returned 0.6% over the past year.

Price Volatility

Is IOC's price volatile compared to industry and market?
IOC volatility
IOC Average Weekly Movement	4.1%
Oil and Gas Industry Average Movement	6.9%
Market Average Movement	7.0%
10% most volatile stocks in IN Market	9.9%
10% least volatile stocks in IN Market	4.5%

Stable Share Price: IOC is less volatile than 75% of Indian stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: IOC's weekly volatility (4%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1959	31,648	n/a	https://www.iocl.com

Indian Oil Corporation Limited, together with its subsidiaries, engages in the refining, pipeline transportation, and marketing of petroleum products in India. It is also involved in the exploration and production of crude oil and gas; and marketing of natural gas and petrochemicals. The company’s products include petrol/gasoline, diesel/gas oil, lubricants and greases, auto gas, cooking gas, kerosene, LPG, bulk/industrial fuels, aviation fuel, marine oils, and bitumen.

Indian Oil Fundamentals Summary

How do Indian Oil's earnings and revenue compare to its market cap?
IOC fundamental statistics
Market Cap	₹672.05b
Earnings (TTM)	₹251.02b
Revenue (TTM)	₹5.89t

2.7x

P/E Ratio

0.1x

P/S Ratio

Is IOC overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
IOC income statement (TTM)
Revenue	₹5.89t
Cost of Revenue	₹4.87t
Gross Profit	₹1.02t
Other Expenses	₹772.81b
Earnings	₹251.02b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	27.34
Gross Margin	17.37%
Net Profit Margin	4.26%
Debt/Equity Ratio	91.4%

How did IOC perform over the long term?

See historical performance and comparison

Dividends

17.2%

Current Dividend Yield

46%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is IOC undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for IOC?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for IOC. This is calculated by dividing IOC's market cap by their current preferred multiple.
What is IOC's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	₹672.05b

IOC key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.3x
Enterprise Value/EBITDA	4x
PEG Ratio	-0.2x

Price to Earnings Ratio vs Peers

How does IOC's PE Ratio compare to its peers?

IOC PE Ratio vs Peers

The above table shows the PE ratio for IOC vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	10.9x
BPCL Bharat Petroleum	5.9x	-7.4%	₹686.4b
HINDPETRO Hindustan Petroleum	4x	2.0%	₹294.1b
500109 Mangalore Refinery and Petrochemicals	5.5x	n/a	₹163.1b
RELIANCE Reliance Industries	28.3x	16.6%	₹16.4t
IOC Indian Oil	2.7x	-12.5%	₹672.1b

Forward PE

Price-To-Earnings vs Peers: IOC is good value based on its Price-To-Earnings Ratio (2.7x) compared to the peer average (10.9x).

Price to Earnings Ratio vs Industry

How does IOC's PE Ratio compare vs other companies in the IN Oil and Gas Industry?

Price-To-Earnings vs Industry: IOC is good value based on its Price-To-Earnings Ratio (2.7x) compared to the Indian Oil and Gas industry average (11.9x)

Price to Earnings Ratio vs Fair Ratio

What is IOC's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

IOC PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	2.7x
Fair PE Ratio	5.7x

Price-To-Earnings vs Fair Ratio: IOC is good value based on its Price-To-Earnings Ratio (2.7x) compared to the estimated Fair Price-To-Earnings Ratio (5.7x).

Share Price vs Fair Value

What is the Fair Price of IOC when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: IOC (₹73.2) is trading below our estimate of fair value (₹106.12)

Significantly Below Fair Value: IOC is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: IOC's earnings are forecast to decline next year, so we can't calculate its PEG ratio.

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Future Growth

How is Indian Oil forecast to perform in the next 1 to 3 years based on estimates from 19 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

-12.5%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: IOC's earnings are forecast to decline over the next 3 years (-12.5% per year).

Earnings vs Market: IOC's earnings are forecast to decline over the next 3 years (-12.5% per year).

High Growth Earnings: IOC's earnings are forecast to decline over the next 3 years.

Revenue vs Market: IOC's revenue (3.5% per year) is forecast to grow slower than the Indian market (11.5% per year).

High Growth Revenue: IOC's revenue (3.5% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: IOC's Return on Equity is forecast to be low in 3 years time (12%).

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Past Performance

How has Indian Oil performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

0.5%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: IOC has high quality earnings.

Growing Profit Margin: IOC's current net profit margins (4.3%) are lower than last year (5.8%).

Past Earnings Growth Analysis

Earnings Trend: IOC's earnings have grown by 0.5% per year over the past 5 years.

Accelerating Growth: IOC's earnings growth over the past year (16%) exceeds its 5-year average (0.5% per year).

Earnings vs Industry: IOC earnings growth over the past year (16%) underperformed the Oil and Gas industry 40.6%.

Return on Equity

High ROE: IOC's Return on Equity (19%) is considered low.

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Financial Health

How is Indian Oil's financial position?

Financial Health Score

2/6

Financial Health Score 2/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: IOC's short term assets (₹1,468.6B) do not cover its short term liabilities (₹1,921.5B).

Long Term Liabilities: IOC's short term assets (₹1,468.6B) exceed its long term liabilities (₹833.4B).

Debt to Equity History and Analysis

Debt Level: IOC's net debt to equity ratio (84.2%) is considered high.

Reducing Debt: IOC's debt to equity ratio has increased from 57.2% to 91.4% over the past 5 years.

Debt Coverage: IOC's debt is not well covered by operating cash flow (19.9%).

Interest Coverage: IOC's interest payments on its debt are well covered by EBIT (6.6x coverage).

Balance Sheet

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Dividend

What is Indian Oil current dividend yield, its reliability and sustainability?

Dividend Score

5/6

Dividend Score 5/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

17.21%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: IOC's dividend (17.21%) is higher than the bottom 25% of dividend payers in the Indian market (0.43%).

High Dividend: IOC's dividend (17.21%) is in the top 25% of dividend payers in the Indian market (1.85%)

Stability and Growth of Payments

Stable Dividend: IOC's dividend payments have been volatile in the past 10 years.

Growing Dividend: IOC's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (46.1%), IOC's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its high cash payout ratio (754.5%), IOC's dividend payments are not well covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

3.7yrs

Average management tenure

CEO

Indian Oil has no CEO, or we have no data on them.

Leadership Team

Experienced Management: IOC's management team is considered experienced (3.7 years average tenure).

Board Members

Experienced Board: IOC's board of directors are not considered experienced ( 1.5 years average tenure), which suggests a new board.

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/29 00:00
End of Day Share Price	2022/06/29 00:00
Earnings	2022/03/31
Annual Earnings	2022/03/31