IOC - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

📊 Investment Analysis: Indian Oil Corporation Ltd. (IOC)

Investment Rating: 3.2

🔍 Fundamentals Summary

ROE: 6.56% & ROCE: 7.37% — relatively weak, signaling subpar capital efficiency compared to industry leaders.

EPS: ₹9.63 — decent, but not high-growth material.

PEG Ratio: -0.80 — negative PEG usually indicates earnings are volatile or declining; not ideal for growth-focused investors.

Dividend Yield: 2.03% — provides passive income, but not significant enough to anchor a long-term thesis.

Debt-to-Equity: 0.82 — moderately leveraged; manageable but worth watching if interest rates rise.

Industry PE: 21.6 vs Stock PE: 17.2 — IOC trades at a slight discount, but it’s not a screaming value buy.

📉 Technical & Price Action

MACD: 0.92 & RSI: 48.2 — shows sideways momentum, neither oversold nor overbought.

Trading close to DMA 50/200 — reflects consolidation, not strong bullish sentiment.

Volume below average — low activity may mean lack of market excitement or indecision.

🎯 Ideal Entry Zone: ₹135 – ₹145 This range balances fair valuation, technical support near DMA levels, and cushions downside risk.

🧭 Strategy If Already Invested

✅ Suggested Holding Period: 1–2 years

IOC fits well for a conservative portfolio seeking exposure to the energy and public sector themes.

Hold if

Dividend remains stable and grows toward 3%+

ROE recovers to 10%+ with sustainable PAT above ₹6,000 Cr+

Debt levels drop below 0.6, improving capital efficiency

Government reforms or sector tailwinds boost margins

🚪 Exit Strategy

Partial Exit: ₹175–₹185 if price rallies without EPS growth or sector support.

Full Exit If

PEG remains negative and EPS declines

ROE stays <7% for 2+ quarters

DII/FII activity turns negative consistently

Dividend gets slashed or payout ratio weakens

IOC is not a classic compounder or aggressive growth stock, but it can still add value in a diversified basket. Think of it as a macro play—benefiting from reforms, geopolitical trends, or commodity cycles, rather than intrinsic growth.

Would you like help building a dividend-oriented portfolio or comparing IOC with BPCL and ONGC for a sector rotation approach? I’m here for it 🔧📦

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