Motilal Oswal Recommends Buy Oil Sector PSU Stock Under Rs 100, Sees 18% Upside Potential

Motilal Oswal Financial Services, a renowned brokerage firm, has come up with a Buy recommendation on Maharatna CPSE, Indian Oil Corporation Of India Ltd. (IOCL). The brokerage has assigned Rs 110 Per share target price on the stock of IOCL, claiming 18% potential upside in the share price, from its current market price. IOCL is a PSU stock operating in Oil & Gas sector. It is a large-cap stock with a market cap of Rs 1,32,457.22 Crore.

Valuation and View

According to the brokerage firm, IOCL is set to commission various projects over the next two years, driving further growth. Refinery projects, currently underway, are expected to be completed as follows: Panipat refinery (25mmtpa) by Sep'24, Gujarat refinery (18mmtpa) by Aug'24, and Baruni refinery (9mmtpa) by Dec'24. SG GRM has increased to ~USD8/bbl over the past few days (from USD4/bbl in 1QFY24). The company is likely to benefit the most among its peers from an increase in refining margin; however, reduction in Russian crude discounts may hurt IOCL. "The stock trades at 4.2x consolidated FY24E EPS and 0.8x FY24E P/BV. We reiterate our BUY rating, valuing IOCL at 0.9x FY25E P/BV to arrive at our TP of INR110," the brokerage has said.

Stock Movement In the Past 5 Years

The stock of IOCL fall 1.55% today to end at Rs 93.80 per share on BSE. It hit intraday high and low of Rs 96.10 and Rs 93.01, respectively. Its recorded 52-week high is Rs 101.45 per share and 52-week-low is Rs 65.20 per share on BSE, respectively.

The stock has declined 6% in the past 1 week, and jumped 2.79% in the past 1 month. It gave 28.58% return in 1 year, while in 1 year, it gave 36.28% return. In 3 years, it gave 58.82% return, however, it declined 14.49% in 5 years.

Disclaimer - The stock has been picked from the brokerage report of Motilal Oswal Financial Services. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.