Indian Oil Corporation Limited Reported A Surprise Loss, And Analysts Have Updated Their Forecasts

Last week, you might have seen that Indian Oil Corporation Limited (NSE:IOC) released its second-quarter result to the market. The early response was not positive, with shares down 6.2% to ₹143 in the past week. Revenues fell 6.2% short of expectations, at ₹1.7t. Earnings correspondingly dipped, with Indian Oil reporting a statutory loss of ₹0.12 per share, whereas the analysts had previously modelled a profit in this period. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Indian Oil after the latest results.

View our latest analysis for Indian Oil

Taking into account the latest results, Indian Oil's 16 analysts currently expect revenues in 2025 to be ₹7.61t, approximately in line with the last 12 months. Per-share earnings are expected to rise 6.0% to ₹13.50. Before this earnings report, the analysts had been forecasting revenues of ₹7.68t and earnings per share (EPS) of ₹16.70 in 2025. So there's definitely been a decline in sentiment after the latest results, noting the substantial drop in new EPS forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at ₹168, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Indian Oil, with the most bullish analyst valuing it at ₹246 and the most bearish at ₹100.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that revenue is expected to reverse, with a forecast 1.5% annualised decline to the end of 2025. That is a notable change from historical growth of 15% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 5.2% annually for the foreseeable future. It's pretty clear that Indian Oil's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at ₹168, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Indian Oil going out to 2027, and you can see them free on our platform here..

Before you take the next step you should know about the 3 warning signs for Indian Oil (1 shouldn't be ignored!) that we have uncovered.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.