Indian Oil Corporation Limited: Comprehensive Stock Analysis Report | Scrolls
- Editor
- Sep 5
- 3 min read
by KarNivesh | 05 September, 2025
Indian Oil Corporation Limited (IOC), India’s largest commercial oil company, plays a vital role in meeting the nation’s energy needs. As of September 2025, IOC’s stock trades at ₹139.70 per share with a market capitalization of ₹1.97 lakh crores, down 29% from its 52-week high of ₹196.80. Despite recent challenges such as lower refining margins and rising debt, IOC remains a strong long-term investment option, supported by India’s growing energy demand, expansion plans worth ₹1.66 lakh crores, and diversification into petrochemicals and renewable energy.
Company Overview
Founded in 1959, IOC operates across the full hydrocarbon value chain—refining, pipelines, marketing, petrochemicals, natural gas, and exploration. It owns 11 refineries with a combined capacity of 80.75 MMTPA, representing 32% of India’s refining capacity. Its marketing strength is unmatched, with over 40,000 retail outlets and leadership in petrol (42.1% market share) and diesel (44.4%).
The company’s strategy rests on three pillars: strengthening core operations via Project SPRINT, diversifying into petrochemicals, and advancing renewable energy. Over the next five years, IOC will invest ₹1.66 lakh crores to raise refining capacity to 98.4 MMTPA, expand petrochemical output from 4.3 to 13 MMTPA by 2030, and boost renewable capacity from 1 GW to 18 GW.
Financial Performance
IOC’s financials have been volatile due to industry cycles. Revenue peaked at ₹8.42 lakh crores in FY2023 but fell to ₹7.58 lakh crores in FY2025. Net profit swung sharply—₹9,792 crores in 2023, surging to ₹41,730 crores in 2024, before sliding to ₹13,598 crores in 2025, a 67% drop due to margin compression. EPS declined from ₹30.30 in FY2024 to ₹9.87 in FY2025.
In Q1 FY2026, IOC posted a net profit of ₹5,689 crores, more than double the previous year. Revenue rose modestly to ₹2,18,608 crores, with record quarterly sales of 26.32 MMT. Gross refining margin (GRM) stood at ₹178 per barrel (converted from $2.15), but adjusted GRM was ₹573 per barrel (from $6.91), far higher than the ₹236 per barrel ($2.84) achieved a year earlier.
Valuation and Debt
With a P/E ratio of 11.69, IOC is slightly undervalued compared to the sector average of 12.52. Its P/B ratio of 1.03 also signals fair value. However, returns remain modest with ROE at 6.51% and ROCE at 7.36%.
Debt has risen to ₹1.52 lakh crores in 2025 from ₹1.33 lakh crores in 2024, pushing the debt-equity ratio to 0.80. Liquidity is tight with a current ratio of 0.67, and interest coverage fell to 3.59 from 9.08. Still, government support and funding access provide stability.
Growth Prospects
IOC dominates India’s refining and marketing space with 43% market share, far ahead of BPCL and HPCL. Future growth lies in refining expansion, petrochemicals, natural gas, and clean energy. The company has committed ₹2.5 lakh crores toward energy transition projects to reach net-zero emissions by 2046, including scaling renewables and advancing green hydrogen and sustainable aviation fuel.
Conclusion
While short-term risks like crude oil volatility, rising debt, and policy pressures remain, IOC’s scale, government backing, and diversification make it a solid long-term bet. Trading at attractive valuations and offering a dividend yield of 2.15%, IOC provides both stability and growth potential, aligned with India’s energy future.
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