Indian Oil Corporation (IOCL IN) – Q1FY27 Result Update – Strong core GRM offsets peak SAED impact – Upgrade to ‘ACCUMUALTE’
Published on 02 Aug 2026
We upgrade the stock to “Accumulate” from “Reduce” led by core GRM of USD19.1/bbl in Q1FY27 despite peak SAED impact and narrowing LPG under-recovery coupled with expected government support. Reported net SAED GRM stood at USD15.6/bbl vs USD2.2/bbl in Q1FY26 (crude inventory loss of USD3-4/bbl), implying core GRM of ~USD19.1/bbl. IOCL expects LPG under-recovery of INR250/cyl in Q2FY27. Reported standalone EBITDA (incl. fx loss of INR1.0bn) was INR20.2bn vs expected losses (PLe: -INR200.8bn; BBGe: -INR144.7bn), aided largely by a finished goods inventory gain of INR150bn, partly offset by inventory loss of USD3-4/bbl on crude. PAT loss stood at INR26.6bn (PLe: -INR185.7bn; BBGe: -INR198.4bn). IOCL maintained FY27 capex guidance at INR327bn. Throughput is guided at 77mmt in FY27 (vs 75.5mmt in FY26), rising to ~85mmt in FY28 and ~90mmt in FY29 as major refining projects get commissioned in FY27. We estimate FY27E/FY28E GRM at USD10.0/6.5/bbl, implying GMM of INR1.5/4.7/ltr. We value the stock at 0.8x FY28E P/BV (prev: 0.7x) and revise our TP to INR147 (earlier: INR125).
