MOSL: IOC (Upgrade to Buy)-Adj. EBITDA marginally above est.-Core GRM at USD7.6/bbl
​IOC: Adj. EBITDA marginally above est.; Core GRM at USD7.6/bbl
(IOCL IN, Mkt Cap USD31.6b, CMP INR387, TP INR458, 18% Upside, Upgrade to Buy)
- IOCL's adj. EBITDA increased 38% YoY (+9% QoQ) to INR91.2b, marginally above our estimate of INR87.7b, primarily due to higher-than-expected core GRM of USD7.6/bbl (est. of USD7.1/bb). Reported GRM of USD4.32/bbl was below our estimate of USD4.6, led by crude inventory loss of INR28b. Marketing inventory loss stood at INR12.4b. The company recorded forex gain of INR6b in the quarter, as against loss of INR3.3b in 1QFY17 and gain of INR15b in 4QFY17. Adj. PAT rose 68% YoY (-28% QoQ) to INR26.7b, below our estimate of INR32.b. Management has written back INR28.1b on account of reversal of earlier provisioning for entry tax liability in the state of Haryana.
- Core GRM at USD7.6/bbl: IOCL reported GRM of USD4.32/bbl (est. of USD4.6), lower than USD8.9/bbl in 4QFY17 and USD10/bbl in 1QFY17 due to inventory loss of USD3.3/bbl. Core GRM stood at USD7.6/bbl, as against USD6.9/bbl in 4QFY17 and USD3.6/bbl in 1QFY17.
- Refining throughput at 17.5mmt: Refining throughout rose 9% YoY (+3% QoQ) to 17.5mmt, led by ramp-up of Paradip refinery. Domestic direct sales grew 2% YoY (+6% QoQ) to 20.7mmt in 1QFY18.
Indian Oil is engaged in the sale of imported crude oil; and exploration of petrochemicals, and oil and gas. Co.'s products include liquefied petroleum gas, natural gas, petrol/gasoline, diesel/gas oil, aviation turbine fuel/jet fuel, lubricants and greases, marine fuels and lubricants, kerosene, bulk/industrial fuels, bitumen, petrochemicals, and crude oil. Co. also provides other products, which comprise benzene, carbon black feed stock, food grade hexane, jute batching oil, micro crystalline wax, mineral turpentine oil, paraffin wax, propylene, raw petroleum coke, sulphur, and toluene.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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