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On Wednesday, CLSA analysts adjusted their stance on Indian Oil Corp. (IOCL:IN), upgrading the stock rating from Underperform to Hold, while maintaining a price target of INR120.00. The revision follows Indian Oil’s third-quarter financial performance for fiscal year 2025, which fell short of CLSA’s forecasts due to underwhelming refining and marketing results.
Indian Oil reported a standalone profit after tax (PAT) for the third quarter that did not meet the expectations set by CLSA analysts. The company’s struggles were attributed to a combination of weak refining margins and marketing operations. Additionally, Indian Oil faced considerable losses in its liquefied petroleum gas (LPG) segment, with the total reaching Rs143 billion by the end of the quarter.
The analysts at CLSA have revised their earnings per share (EPS) forecast for Indian Oil for the fiscal year 2025, reducing it by 12%. They have also extended their valuation horizon to December 2025. Despite these adjustments, the price target has been kept steady at INR120.00.
The decision to upgrade Indian Oil’s rating comes after a significant 30% decline in the company’s stock price over the past four months. This price correction has brought the stock closer to CLSA’s price target, prompting the change in rating to Hold.
The analysts are taking a cautious approach and are waiting for the official budget announcement before incorporating any potential compensation for LPG under-recoveries into their valuation model. The outcome of this announcement could have implications for Indian Oil’s financials and the valuation of its stock.
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