Saturday, May 26, 2018

Buy IOC; target of Rs 263: Motilal Oswal


Motilal Oswal's research report on IOC

IOCL��s adjusted EBITDA declined 10% YoY (grew 9% QoQ) to INR76b, in line with our estimate of INR75b. At INR110b, reported EBITDA beat our estimate of INR89b, led by higher inventory gain of INR34b. Reported PAT grew 40% YoY (declined 34% QoQ) to INR52b (our estimate: INR48b), led by (a) 13% YoY (99% QoQ) growth in interest outgo to INR13b (our estimate.

Outlook

IOCL is trading at 7.1x FY20E EPS of INR21.7 and 4.8x FY20E EV/EBTIDA. We value refining at 6x EV/EBITDA, marketing at 7.5x EV/EBITDA and pipeline at 7.5x EV/EBITDA; we reiterate Buy with a target price of INR263.

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