1. At a Glance
India’s largest oil refiner and fuel distributor. Owns 11 refineries, 60,900+ retail outlets, and 31% of India’s refining capacity. A PSU juggernaut that touches your daily life but trades like it’s stuck in 2012. High dividend. Mid returns. Low love.
2. Introduction with Hook
If the Indian economy is a racing car, IOCL is the petrol in its veins — except the car is now electric, and IOCL is trying to sell engine oil on the side.
- Operates 11 refineries (80.8 MMTPA capacity)
- Handles 31% of India’s refining output
- 42% market share in POL (petroleum, oil & lubricants)
But…
- ROE = 6.5%
- Profit down 68% from peak
- Stock down 12% YoY
It’s big. It’s bulky. It’s a PSU. What could possibly go wrong?
3. Business Model (WTF Do They Even Do?)
IOCL is like that one uncle who does everything — and none of it quietly.
- Refining: 11 owned refineries + 1.5 via subsidiaries = 80.8 MMTPA
- Pipelines: Transports oil, gas & products across 15,000+ km
- Retail: 60,900+ touch points. You’ve filled your scooter at one.
- Gas & Petrochem: CNG, LNG, R&D, polymers, aromatics
- Exploration: JV-based offshore/onshore ventures
94% of revenue = fuel. But future = renewables + EV infra + petrochems.
4. Financials Overview
plaintextCopyEditFY25 (₹ Cr)
Revenue : ₹7,58,106
Net Profit : ₹13,789
EPS : ₹9.63
ROE : 6.56%
Book Value : ₹132
Dividend Yield : 1.99%
Stock P/E : 17.6
- Sales down from ₹8.4 lakh Cr peak (FY23)
- Profit cut in half vs last year
- OPM collapsed to 5% (was 10% in FY24)
5. Valuation
Current price ₹151
- P/E = 17.6 (too high for this growth rate)
- P/B = 1.14
- Dividend Yield = 2%
Fair Value Range (Edu Methodology):
| Method | FV Estimate |
|---|---|
| P/B @ 1.5x | ₹198 |
| DCF Estimate | ₹145–₹170 |
| Dividend Yield @ 4% | ₹115–₹130 |
🧠 EduFair Range: ₹130–₹165
Price > ₹165? You’re buying hope.
Price < ₹130? You’re buying diesel with a coupon.
6. What’s Cooking – News, Triggers, Drama
- ₹3 Dividend announced in Jul 2025
- Utilization at 105% — they’re squeezing refineries like lemons
- Petchem expansion, green hydrogen infra in development
- Electric Vehicle infra rollout in collaboration with oil majors
- Heavy capex on pipeline + petrochem
- But: Net profit has dropped 68% from FY24 peak
7. Balance Sheet
| Metric | Mar 2025 (₹ Cr) |
|---|---|
| Equity Capital | 13,772 |
| Reserves | 1,72,716 |
| Borrowings | 1,52,271 |
| Total Assets | 5,06,867 |
| CWIP | 73,740 |
Observations:
- Debt increasing again = Capex-heavy phase
- CWIP = ₹74k Cr → future revenue unlock pending
- ROCE dropped to 7.3% = weak capital efficiency
8. Cash Flow – Sab Number Game Hai
| Cash Flow Item | FY25 (₹ Cr) |
|---|---|
| Operating Cash Flow | 34,699 |
| Investing Cash Flow | -31,848 |
| Financing Flow | -3,425 |
| Net Flow | -573 |
- Still cash positive operationally
- Heavy investing drag → refinery expansion + EV infra?
- Dividend still paid → but debt-funded?
9. Ratios – Sexy or Stressy?
| Ratio | FY25 |
|---|---|
| ROE | 6.56% |
| ROCE | 7.37% |
| OPM | 5% |
| Debt/Equity | 0.88 |
| Dividend Payout | 31% |
Verdict:
Too capital intensive to dazzle. Too regulated to crash.
It’s not sexy, it’s stable. The literal Maruti Suzuki of the fuel world.
10. P&L Breakdown – Show Me the Money
| Year | Revenue (₹ Cr) | Net Profit (₹ Cr) | EPS (₹) | OPM % |
|---|---|---|---|---|
| FY23 | 8,41,756 | 11,704 | ₹6.93 | 4% |
| FY24 | 7,76,352 | 43,161 | ₹29.55 | 10% |
| FY25 | 7,58,106 | 13,789 | ₹9.63 | 5% |
- FY24 = golden fluke (lower input cost, higher margins)
- FY25 = return to reality
- EPS fell 67% in one year
11. Peer Comparison
| Company | P/E | ROE % | Div Yield | OPM % | CMP/BV |
|---|---|---|---|---|---|
| IOCL | 17.6 | 6.56 | 1.99% | 5% | 1.14 |
| BPCL | 11.1 | 17.3 | 6.06% | 5.7% | 1.85 |
| HPCL | 13.9 | 13.7 | 2.39% | 3.8% | 1.83 |
| MRPL | 459 | 0.43 | 2.03% | 2.4% | 1.99 |
Takeaway:
BPCL wins on returns and yield. IOCL is mid-tier — safe, but unexciting.
12. Miscellaneous – Shareholding, Promoters
| Shareholder | % (Mar 2025) |
|---|---|
| Promoter (GoI) | 51.5% |
| FIIs | 7.39% |
| DIIs | 9.97% |
| Govt (other) | 19.57% |
| Public | 11.57% |
| Total Holders | 31.89 lakh |
- GoI still holds the leash
- FIIs and DIIs reduced slightly
- Retail slowly increasing — dividend chasers?
13. EduInvesting Verdict™
Indian Oil is the embodiment of Bharat — massive, overregulated, vital, and never quite valued right. It won’t disappear, but don’t expect it to suddenly start running like a startup.
This is a classic PSU dividend utility: good for pensioners, bad for thrill-seekers.
A fuel giant in an EV world — either it evolves, or it gets subsidized into retirement.
Metadata
– Written by EduInvesting Research | 18 July 2025
– Tags: IOCL, Indian Oil Corporation, PSU Stocks, Refining Sector, Oil & Gas, Dividend Investing, Energy Infrastructure
