IOC - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.7
| Stock Code | IOC | Market Cap | 2,00,875 Cr. | Current Price | 142 ₹ | High / Low | 189 ₹ |
| Stock P/E | 6.15 | Book Value | 133 ₹ | Dividend Yield | 4.92 % | ROCE | 7.26 % |
| ROE | 6.41 % | Face Value | 10.0 ₹ | DMA 50 | 151 ₹ | DMA 200 | 154 ₹ |
| Chg in FII Hold | 1.27 % | Chg in DII Hold | -0.90 % | PAT Qtr | 12,126 Cr. | PAT Prev Qtr | 7,610 Cr. |
| RSI | 42.4 | MACD | -1.64 | Volume | 1,79,16,777 | Avg Vol 1Wk | 1,36,82,662 |
| Low price | 130 ₹ | High price | 189 ₹ | PEG Ratio | -0.28 | Debt to equity | 0.74 |
| 52w Index | 20.5 % | Qtr Profit Var | 420 % | EPS | 23.2 ₹ | Industry PE | 15.7 |
Core Financials:
IOC shows moderate fundamentals. ROE is 6.41% and ROCE 7.26%, reflecting weak efficiency. EPS at ₹23.2 is strong, supported by a sharp quarterly PAT surge (₹12,126 Cr vs ₹7,610 Cr, +420%). Debt-to-equity is manageable at 0.74, indicating moderate leverage.
Valuation:
Stock P/E of 6.15 is significantly lower than industry average (15.7), suggesting undervaluation. PEG ratio of -0.28 highlights poor growth prospects. Price-to-book is ~1.07, attractive relative to intrinsic value. Dividend yield of 4.92% provides strong income support.
Business Model & Health:
IOC operates in refining, marketing, and distribution of petroleum products, benefiting from scale and government backing. Competitive advantage lies in its integrated operations and market leadership. However, profitability efficiency remains weak, and growth outlook is limited.
Entry Zone:
Ideal entry zone: ₹130–₹135. Current price ₹142 is near fair entry. Long-term holding is viable with dividend support, but efficiency improvements are needed for sustained growth.
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Positive
- Attractive P/E (6.15 vs industry 15.7)
- Strong EPS (₹23.2)
- Dividend yield of 4.92%
- Quarterly PAT surge (+420%)
- FII holdings increased (+1.27%)
Limitation
- Weak ROE (6.41%) and ROCE (7.26%)
- PEG ratio (-0.28) indicates poor growth prospects
- Technical weakness: RSI 42.4, negative MACD (-1.64)
- Price below 50 DMA (151 vs 142) and 200 DMA (154 vs 142)
Company Negative News
- Efficiency metrics remain weak
- DII holdings reduced (-0.90%)
- Technical indicators show bearish momentum
Company Positive News
- Quarterly PAT growth (₹12,126 Cr vs ₹7,610 Cr)
- FII confidence improved (+1.27%)
- Dividend yield remains attractive
Industry
Oil & gas sector trades at industry P/E of 15.7, supported by energy demand and government policies. IOC trades at a discount, offering value relative to peers, but efficiency metrics lag behind.
Conclusion
IOC is undervalued with strong dividend support and PAT growth but weak efficiency metrics. Rating: 3.7. Entry near ₹130–₹135 is preferable. Long-term holding (3–5 years) is viable with dividend support, but exit strategy around ₹180–₹190 if fundamentals stagnate.
Would you like me to also prepare a sector overlay HTML table comparing IOC with BPCL and HPCL, so you can benchmark valuation, ROE, and dividend yield side by side?