IOC - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.2
| Stock Code | IOC | Market Cap | 1,97,033 Cr. | Current Price | 140 ₹ | High / Low | 189 ₹ |
| Stock P/E | 5.35 | Book Value | 145 ₹ | Dividend Yield | 5.02 % | ROCE | 17.5 % |
| ROE | 19.2 % | Face Value | 10.0 ₹ | DMA 50 | 146 ₹ | DMA 200 | 152 ₹ |
| Chg in FII Hold | 1.27 % | Chg in DII Hold | -0.90 % | PAT Qtr | 11,378 Cr. | PAT Prev Qtr | 12,126 Cr. |
| RSI | 46.6 | MACD | -2.28 | Volume | 1,25,44,490 | Avg Vol 1Wk | 2,12,21,439 |
| Low price | 130 ₹ | High price | 189 ₹ | PEG Ratio | 0.08 | Debt to equity | 0.60 |
| 52w Index | 15.8 % | Qtr Profit Var | 56.6 % | EPS | 26.1 ₹ | Industry PE | 14.8 |
📊 Financials: Indian Oil Corporation (IOC) reports quarterly PAT of ₹11,378 Cr, slightly down from ₹12,126 Cr, but still showing strong profitability. ROE at 19.2% and ROCE at 17.5% reflect healthy efficiency. Debt-to-equity ratio of 0.60 indicates moderate leverage. EPS of ₹26.1 supports strong earnings power, while quarterly profit variation (+56.6%) highlights resilience in performance.
💹 Valuation: P/E ratio of 5.35 is well below industry average (14.8), suggesting undervaluation. Book value of ₹145 vs current price ₹140 shows the stock trades near intrinsic value. PEG ratio of 0.08 indicates growth prospects are attractively priced. Dividend yield of 5.02% provides strong income support, enhancing investor appeal.
🏦 Business Model: IOC operates as India’s largest oil refining and marketing company, with integrated operations across refining, pipelines, and retail distribution. Its competitive advantage lies in scale, government backing, and nationwide presence. Strong cash flows and diversified operations strengthen overall health.
📈 Entry Zone: Attractive entry near ₹130–140, close to support levels. Current price reflects undervaluation relative to industry. Long-term holding is highly suitable given strong fundamentals, dividend yield, and market leadership.
Positive
- ✅ Strong ROE (19.2%) and ROCE (17.5%).
- ✅ Dividend yield of 5.02% provides steady income.
- ✅ P/E ratio (5.35) well below industry average (14.8), indicating undervaluation.
Limitation
- ⚠️ EPS of ₹26.1 is modest relative to market cap.
- ⚠️ Profit slightly declined sequentially (₹12,126 Cr to ₹11,378 Cr).
- ⚠️ Dependence on global crude price fluctuations.
Company Negative News
- 📉 DII holdings decreased (-0.90%), showing reduced domestic institutional confidence.
- 📉 Margins remain sensitive to crude oil volatility.
Company Positive News
- 📈 FII holdings increased (+1.27%), reflecting foreign investor interest.
- 📈 Strong dividend yield enhances investor appeal.
- 📈 Consistent profitability despite global volatility.
Industry
- 🛢️ Oil & gas sector trades at average P/E of 14.8, highlighting IOC’s undervaluation.
- 🛢️ Rising demand for energy supports long-term growth.
- 🛢️ Sector faces challenges from crude price swings and renewable energy transition.
Conclusion
🔎 IOC is fundamentally strong with excellent efficiency, moderate leverage, and attractive dividend yield. Valuation remains compelling compared to industry peers. Entry near ₹130–140 offers a margin of safety. Long-term holding is highly suitable given market leadership, strong cash flows, and consistent shareholder returns.
For a sharper sectoral view, we could compare IOC with BPCL or HPCL to highlight differences in valuation, margins, and dividend yields across India’s oil marketing companies.