Indian Oil shares get another upgrade, days after their highest price target – CNBC TV18
Jefferies has also raised its price target on Indian Oil to ₹185 from ₹165 earlier. The revised price target implies a potential upside of 31% from Thursday’s closing level.
Shares of Indian Oil are still down 30% from their recent peak of ₹196 after having recovered from the November lows of ₹129.
Indian Oil enjoys the highest refining to marketing volume ratio among its OMC peers, making it the largest beneficiary in case refining margins improve, Jefferies said, adding that refining is said to accelerate in 2025 due to accelerated capacity closures amidst healthy demand.
The brokerage also said that the recent correction in Indian Oil’s stock price has turned favourable after a correction of nearly 20% in the last three months until November.
Shares of Indian Oil are now trading at a steeper 70% discount to the Nifty 50 index, compared to its long-term average of 57%, according to Jefferies.
Jefferies expects a rise in the Singapore GRM to rise in 2025, having already risen to $6.1 from $1.4 in the last two months.
“We see improved earnings outlook on rising GRMs, amidst better than normative marketing margins. Risk-reward is favourable post the correction,” the Jefferies note said.
Recently, brokerage firm Antique ascribed the highest price target for Indian Oil at ₹246, projecting a potential upside of over 70%.
Out of the 34 analysts that have coverage on Indian Oil, 16 of them have a “buy” rating, seven of them say “hold”, while 11 of them have a “sell” recommendation.
Shares of Indian Oil ended 1.1% lower on Thursday at ₹141.6. The stock is up only 8% so far in 2024.
