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B e a t s e s t i m a t e s o n l o w e r s u b s i d y b u r d e n …
Indian Oil Corp (IOCL) declared its Q4FY11 results with revenues of |
98,722.7 crore, EBITDA of | 5782.7 crore and PAT of | 3905.2 crore. The
profitability was above our estimates mainly due to higher refining
margins and lower net under-recoveries. The downstream companies
shared lower net subsidy burden of 8.8% in FY11 against 12.2% in FY10.
This got reflected in the current quarterly results. Higher product spreads
in global markets increased the refining margins to US$7.9 per barrel in
Q4FY11. We have increased our Brent crude oil prices estimates to
US$100 per barrel, going forward, vs. our earlier estimate of US$85 per
barrel. We have also assumed net under-recoveries for downstream
companies at 8.8% in FY12E and FY13E. This would increase our EPS
estimates to | 32.1 and | 32.7 in FY12E and FY13E, respectively. We
recommend a HOLD rating on the stock with a price target of | 350.
ƒ Highlights of the quarter
The crude oil throughput increased by 7.1% YoY from 16.6 MMT in
Q4FY10 to 17.7 MMT in Q4FY11 mainly on account of higher
throughput from its Paradip refinery. The gross refining margins
(GRMs) increased from US$3.4 per barrel in Q4FY10 to US$7.9 per
barrel in Q4FY11 on account of higher product spreads in the global
markets. The total market sales increased 6.6% YoY from 16.6 MMT
in Q4FY10 to 17.7 MMT in Q4FY11. Lower net subsidy burden of
8.8% in FY11 against 12.2% in FY10 for downstream companies led
to over-recoveries of | 1920 crore in Q4FY11.
V a l u a t i o n
IOCL is trading at 10x FY12E and 9.8x FY13E EPS of | 32.1 and | 32.7,
respectively. We recommend the stock with a HOLD rating and a price
target of | 350 (valuation based on average of P/BV multiple: | 342 per
share and P/E multiple: | 358 per share).
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
B e a t s e s t i m a t e s o n l o w e r s u b s i d y b u r d e n …
Indian Oil Corp (IOCL) declared its Q4FY11 results with revenues of |
98,722.7 crore, EBITDA of | 5782.7 crore and PAT of | 3905.2 crore. The
profitability was above our estimates mainly due to higher refining
margins and lower net under-recoveries. The downstream companies
shared lower net subsidy burden of 8.8% in FY11 against 12.2% in FY10.
This got reflected in the current quarterly results. Higher product spreads
in global markets increased the refining margins to US$7.9 per barrel in
Q4FY11. We have increased our Brent crude oil prices estimates to
US$100 per barrel, going forward, vs. our earlier estimate of US$85 per
barrel. We have also assumed net under-recoveries for downstream
companies at 8.8% in FY12E and FY13E. This would increase our EPS
estimates to | 32.1 and | 32.7 in FY12E and FY13E, respectively. We
recommend a HOLD rating on the stock with a price target of | 350.
ƒ Highlights of the quarter
The crude oil throughput increased by 7.1% YoY from 16.6 MMT in
Q4FY10 to 17.7 MMT in Q4FY11 mainly on account of higher
throughput from its Paradip refinery. The gross refining margins
(GRMs) increased from US$3.4 per barrel in Q4FY10 to US$7.9 per
barrel in Q4FY11 on account of higher product spreads in the global
markets. The total market sales increased 6.6% YoY from 16.6 MMT
in Q4FY10 to 17.7 MMT in Q4FY11. Lower net subsidy burden of
8.8% in FY11 against 12.2% in FY10 for downstream companies led
to over-recoveries of | 1920 crore in Q4FY11.
V a l u a t i o n
IOCL is trading at 10x FY12E and 9.8x FY13E EPS of | 32.1 and | 32.7,
respectively. We recommend the stock with a HOLD rating and a price
target of | 350 (valuation based on average of P/BV multiple: | 342 per
share and P/E multiple: | 358 per share).
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