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G o v e r n m e n t s u b s i d y l e a d s t o p r o f i t s …
Indian Oil Corporation (IOCL) declared its Q3FY12 results with revenues at
| 115641.8 crore, EBITDA at | 11158.2 crore and PAT at | 2488.4 crore.
The results were above our estimates mainly on account of additional
budgetary support from the government (total compensation of | 45000
crore for 9MFY12) and higher upstream share at 47.1% of gross underrecoveries. IOCL had net over recovery of | 7002.2 crore during Q3FY12.
We expect gross under-recoveries at ~| 1,39,534 crore and ~| 1,28,672
crore in FY12E and FY13E, respectively. We believe the government will
make sure that the OMCs report profits for FY12E. Hence, we assume net
under-recoveries for downstream companies at 6% in FY12E while
keeping it at 8.8% for FY13E. We estimate IOCL will report EPS of | 15.6
and | 34.0, respectively, in FY12E and FY13E. We recommend a BUY
rating on the stock with a price target of | 350.
ƒ Highlights of the quarter
The crude oil throughput grew 6.8% YoY to 14.2 MMT whereas total
sales increased 6.4% YoY to 18.4 MMT. The gross refining margins
(GRMs) at US$4.3 per barrel in Q3FY12 grew sequentially on a QoQ
basis due to inventory gain. Interest costs grew 116.4% on a YoY
basis due to a delay in government compensation towards underrecovery, which led to increase in working capital loans. The
company has made provisions of | 6170 crore as per Supreme
Court’s interim order in a case against the UP government regarding
entry tax on crude brought into Mathura refinery.
V a l u a t i o n
The stock is trading at 20.5x FY12E and 9.4x FY13E EPS of | 15.6 and
| 34.0, respectively. We recommend a BUY rating on the stock and a
price target of | 350 (valuation based on average of P/BV multiple: | 328
per share and P/E multiple: | 372 per share).
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
G o v e r n m e n t s u b s i d y l e a d s t o p r o f i t s …
Indian Oil Corporation (IOCL) declared its Q3FY12 results with revenues at
| 115641.8 crore, EBITDA at | 11158.2 crore and PAT at | 2488.4 crore.
The results were above our estimates mainly on account of additional
budgetary support from the government (total compensation of | 45000
crore for 9MFY12) and higher upstream share at 47.1% of gross underrecoveries. IOCL had net over recovery of | 7002.2 crore during Q3FY12.
We expect gross under-recoveries at ~| 1,39,534 crore and ~| 1,28,672
crore in FY12E and FY13E, respectively. We believe the government will
make sure that the OMCs report profits for FY12E. Hence, we assume net
under-recoveries for downstream companies at 6% in FY12E while
keeping it at 8.8% for FY13E. We estimate IOCL will report EPS of | 15.6
and | 34.0, respectively, in FY12E and FY13E. We recommend a BUY
rating on the stock with a price target of | 350.
ƒ Highlights of the quarter
The crude oil throughput grew 6.8% YoY to 14.2 MMT whereas total
sales increased 6.4% YoY to 18.4 MMT. The gross refining margins
(GRMs) at US$4.3 per barrel in Q3FY12 grew sequentially on a QoQ
basis due to inventory gain. Interest costs grew 116.4% on a YoY
basis due to a delay in government compensation towards underrecovery, which led to increase in working capital loans. The
company has made provisions of | 6170 crore as per Supreme
Court’s interim order in a case against the UP government regarding
entry tax on crude brought into Mathura refinery.
V a l u a t i o n
The stock is trading at 20.5x FY12E and 9.4x FY13E EPS of | 15.6 and
| 34.0, respectively. We recommend a BUY rating on the stock and a
price target of | 350 (valuation based on average of P/BV multiple: | 328
per share and P/E multiple: | 372 per share).
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