IOCL shares trade volatile as Q1 misses estimates; Should you sell?

IOCL share price: Indian Oil Corp shares were volatile as June-quarter profit nearly doubles but misses estimates

Shares of Indian Oil Corp Ltd (IOCL) were volatile on Tuesday, even as the company's net profit in the June quarter of the current financial year nearly doubled, amid a marginal rise in margins. The mixed movement came as the earnings missed the street's estimates. 

 

The oil refinery firm's stock fell as much as 1.07 per cent to ₹138.8 per share, the lowest level since June 23. However, the stock recouped losses to trade 0.33 per cent higher, compared to a 0.16 per cent advance in the benchmark Nifty50 as of 10:28 AM. 

 

The Indian Oil stock is up currently for the second straight session and has fallen nearly 10 per cent from its July peak. The shares have risen 3.2 per cent so far this year, compared to a 5.3 per cent gain in Nifty50. The company has a market capitalisation of ₹1.9 trillion as per BSE data.    Track LIVE Stock Market Updates Here

India Oil Corporation Limited Q1 results 

The firm reported a consolidated net profit of ₹6,813.71 crore for the first quarter of the financial year 2025-26 (Q1 FY26), jumping 93.1 per cent year-on-year (Y-o-Y) from ₹3,528.49 crore in Q1 FY25. However, on a sequential basis, the net profit was down by 16.1 per cent from ₹8,123.64 crore in the previous quarter.

 

Oil major's revenue from operations in Q1 FY26 stood at ₹2.21 trillion, marginally higher by 0.9 per cent from ₹2.19 trillion in Q1 FY25. Sequentially, the revenue remained flat.

 

Indian Oil’s expenses for Q1 FY26 stood at ₹2.14 trillion, down 0.6 per cent from ₹2.16 trillion in Q1 FY25 but up 1.9 per cent sequentially from ₹2.12 trillion in Q4 FY25.  

Analysts on IOCL Q1 earnings

IOCL's June quarter results missed Nuvama Institutional Equities and consensus estimates due to weak refining, petrochemicals, and inventory losses, partly offset by strong marketing margins.

 

Nuvama said IOCL’s peak earnings are behind, citing weak near-term refining margins, LPG under-recoveries, and subdued petrochemical performance. A high capital expenditure cycle is also expected to keep return ratios muted, making the risk-reward unfavourable. The brokerage maintained a 'Reduce'  rating on the stock.

 

Motilal Oswal downgraded the IOCL stock to 'Neutral', set its target price at ₹150 per share as the Q1 results came below its estimates due to higher-than-expected refining inventory losses.

 

The brokerage noted that IOCL is set to commission multiple projects over the next two years, which should drive growth acceleration, the brokerage said.   

Antique Stock Broking remained constructive on IOCL, citing healthy auto-fuel margins, a recovery in GRMs, and 18 million tonnes of refining capacity expansion slated for completion over the next 12 months. Antique also highlighted the government’s approval of LPG compensation, which reassures recovery of current and future losses.

 

The brokerage maintained a Buy rating on IOCL but trimmed its target price to ₹195 from ₹200 earlier.