Indian Oil Corporation (IOCL IN) – Q3FY26 Result Update – Strong GRMs boost EBITDA/PAT – Accumulate
Published on 06 Feb 2026
Refining throughput surged to 19.4mmt (utilization of 109.7%) vs 17.6mmt QoQ, while reported/core GRMs improved to USD 12.2/13.5/bbl from USD10.7/8.9/bbl QoQ, driven by continued strength in product cracks in Q3FY26. Domestic sales volumes increased by 14.5%/4.8% QoQ/YoY to 23.1mmt. Implied gross marketing margin (GMM) stood at Rs7.0/ltr, broadly flat QoQ and YoY. Strong GRMs and higher volumes drove a sharp standalone EBITDA beat, rising to Rs212.9bn (PLe Rs137.2bn; BBGe Rs172.6bn) compared with Rs145.8bn in Q2FY26 and Rs71.2bn in Q3FY25. Standalone PAT increased sharply to Rs125.9bn (PLe Rs70.8bn; BBGe Rs98.8bn) vs Rs76.1bn in Q2FY26 and Rs28.7bn in Q3FY25. Petchem remained a drag, with EBIT loss of Rs36.2bn vs EBIT profit of Rs1.6bn in Q2FY26 amid weak margins. Capex target for FY26 stands at Rs347bn, of which IOCL has incurred Rs243.4bn as of Dec’25. We build in GRMs of USD6.3/6.0/bbl and blended GMM of Rs4.9/4.8/ltr for FY27E/FY28E. We revise our valuation multiple to 1.1x Dec’27E (from 1.0x), reflecting improved operating performance, and reiterate our ‘Accumulate’ rating with a TP of Rs195 (earlier Rs175), driven by sustained strength in diesel cracks and no expectation of major refinery maintenance shutdowns.
