Discover the investment potential of Indian Oil Corporation, India’s leading energy company. Explore key insights and analysis to make informed decisions about investing in this dynamic industry leader.
Indian oil corporation stands as a foundation of India’s energy landscape, driving advancement and fuelling the nation’s growth. With a legacy dating back centuries, India’s oil industry has evolved into a dynamic force, embracing development and supportability. From exploration to distribution, Indian oil play a pivotal role in meeting the country’s energy needs while exploring the intricacies of the global market. As India strives towards energy security and environmental stewardship, the significance of Indian oil corporation in shaping the nation’s future cannot be overstated.
Table of Contents
About Indian Oil Corporation
Indian Oil Corporation Limited (IOCL or IOC), operating as IndianOil, is India’s leading energy sector oil and gas company, owned by the Ministry of Petroleum and Natural Gas. Based in New Delhi, it’s a key player in the public sector, overseen by the same ministry. Notably, Indian Oil holds the 94th spot on the Fortune Global 500 list, showcasing its significant stature in the corporate world. As the largest government-owned oil producer in India, it commands both capacity and revenue. Presently boasting a refining capacity of 80.55MMTPA
Indian Oil aims to elevate it to an impressive 107MMTPA by 2024-25. As of March 31, 2021, the company employs 31,648 individuals, including 2,776 women, representing 8.77% of the workforce. Indian Oil’s operations span the entire hydrocarbon value chain, encompassing refining, pipeline services, petroleum product marketing, as well as exploration and production of petroleum, natural gas, and petrochemicals. Furthermore, Indian Oil is actively diversifying into renewable energy and expanding its global footprint, with subsidiaries in Sri Lanka, Mauritius, and the Middle East, ensuring its relevance in a rapidly changing energy landscape.
Subsidiaries of Indian Oil Corporation
No. | Subsidiaries | Percentage Shareholding |
1 | Chennai Petroleum Corporation Limited | 51.9% |
2 | Indian Catalyst Private Limited | 100.0% |
3 | IndianOil (Mauritius) Ltd | 100.0% |
4 | Lanka IOC PLC | 75.1% |
5 | IOC Middle East FZE | 100.0% |
6 | IOC Sweden AB | 100.0% |
7 | IOCL (USA) Inc | 100.0% |
8 | IndOil Global B.V. | 100.0% |
9 | IOCL Singapore PTE Limited | 100.0% |
Share Holding Pattern of Indian Oil Corporation
These figures represent significant actions taken by a company that directly influence shareholder value. They signify material changes within the company and have an impact on its stakeholders:
- Promoter Shareholding: 51.50%
- FII (Foreign Institutional Investor) Shareholding: 8.50%
- DII (Domestic Institutional Investor) Shareholding: 7.99%
- MF (Mutual Fund) Shareholding: 2.34%
- Public Shareholding: 29.6%
Fundamental analysis indicators of Indian Oil Corporation (IOC). From this analysis we’ll delve into the financial ratios of Indian Oil Corporation, dissecting the data from March 2020 to March 2023, to provide you with valuable insights into the company’s profitability, liquidity, solvency, efficiency, valuation, and growth.
Fundamental Analysis of Indian Oil Corporation | ||||
Ratio | March 2023 | March 2022 | March 2021 | March 2020 |
Profitability Ratio | ||||
Gross Profit Margin | 11.18% | 15.28% | 18.83% | 7.90% |
Net Profit Margin | 1.29% | 4.26% | 5.99% | -0.155% |
Return on Equity (ROE) | 7.76% | 18.80% | 19.35% | -0.936% |
Liquidity Ratio | ||||
Current Ratio | 0.769 | 0.764 | 0.717 | 0.686 |
Quick Ratio (Acid-Test Ratio) | 0.183 | 0.183 | 0.202 | 0.271 |
Solvency Ratio | ||||
Debt to Equity Ratio | 1.07 | 0.925 | 1.04 | 1.25 |
Interest Coverage Ratio | 2.88 | 9.28 | 8.03 | -0.334 |
Efficient Ratio | ||||
Inventory Turnover Ratio | 7.36 | 5.12 | 3.90 | 7.37 |
Account Receivable Turnover Ratio | 45.76 | 28.72 | 19.64 | 23.49 |
Valuation Ratio | ||||
Price to earning Ratio (P/E) | 10.96 | 4.35 | 4.00 | -85.95 |
Price to Book Ratio (P/B) | 0.850 | 0.818 | 0.773 | 0.805 |
Growth Ratio | ||||
Earning per Share (EPS) Growth | 7.11 | 18.23 | 15.32 | -0.633 |
Revenue Growth | 845,707.42 | 602,488.01 | 382,608.33 | 489,215.08 |
Profitability Ratio
Gross Profit Margin:
The gross profit margin reflects the percentage of revenue that exceeds the cost of goods sold. Over the past four years, gross profit margin of Indian Oil Corporation has shown a declining trend, from 18.83% in March 2021 to 11.18% in March 2023.
Net Profit Margin:
The net profit margin indicates the percentage of revenue that translates into profit after accounting for all expenses. Net profit margin of Indian Oil Corporation has fluctuated, with a significant decrease in March 2023 compared to the previous years, possibly indicating challenges in cost management.
Return on Equity (ROE):
ROE measures the profitability of a company in relation to its shareholders’ equity. ROE of Indian Oil Corporation has experienced a notable decline in recent years, dropping to 7.76% in March 2023 from 19.35% in March 2021, suggesting a decrease in efficiency in generating returns for shareholders.
Liquidity Ratio
Current Ratio:
The current ratio assesses a company’s ability to meet its short-term obligations with its current assets. Current ratio of Indian Oil Corporation has remained below 1, indicating potential difficulties in meeting short-term liabilities with its current assets.
Quick Ratio (Acid-Test Ratio):
The quick ratio measures a company’s ability to meet short-term obligations with its most liquid assets. Similar to the current ratio, Quick ratio of Indian Oil Corporation has remained below the desirable threshold of 1, signalling a potential liquidity risk.
Solvency Ratio
Debt to Equity Ratio:
The debt-to-equity ratio gauges the proportion of debt financing relative to equity financing. Debt to equity ratio of Indian Oil Corporation has fluctuated but has generally been above 1, indicating a reliance on debt financing to support its operations.
Interest Coverage Ratio:
The interest coverage ratio indicates a company’s ability to cover its interest expenses with its earnings before interest and taxes (EBIT). Interest coverage ratio of Indian Oil Corporation has shown variability, with a significant decrease in March 2023, possibly indicating challenges in servicing debt obligations.
Efficiency Ratio
Inventory Turnover Ratio:
The inventory turnover ratio evaluates how efficiently a company manages its inventory. Inventory turnover ratio of Indian Oil Corporation has fluctuated over the years, with a notable increase in March 2023 compared to the previous years, suggesting improved inventory management.
Account Receivable Turnover Ratio:
The accounts receivable turnover ratio measures how efficiently a company collects payments from its customers. Accounts receivable turnover of Indian Oil Corporation ratio has shown improvement over the years, indicating better credit management practices.
Valuation Ratio
Price to Earnings Ratio (P/E):
The price to earnings ratio compares a company’s current share price to its earnings per share (EPS). P/E ratio of Indian Oil Corporation has varied significantly, with a sharp increase in March 2023, possibly due to market perceptions or changes in earnings.
Price to Book Ratio (P/B):
The price to book ratio compares a company’s market value to its book value. P/B ratio of Indian Oil Corporation has shown slight fluctuations but has generally remained within a stable range over the years.
Growth Ratio
Earnings per Share (EPS) Growth:
EPS growth reflects the increase in a company’s earnings per share over time. EPS growth of Indian Oil Corporation has been positive, albeit with fluctuations, indicating varying profitability levels over the years.
Revenue Growth:
Revenue growth measures the increase in a company’s total revenue over time. Indian Oil Corporation has demonstrated substantial revenue growth, particularly evident in the significant increase from March 2021 to March 2023.
In conclusion, the fundamental analysis of Indian Oil Corporation reveals both strengths and areas of concern. While the company has exhibited growth in revenue and improvements in efficiency metrics, challenges persist in terms of profitability, liquidity, and debt management. Investors should carefully consider these factors alongside other qualitative and quantitative aspects before making investment decisions.
Technical Analysis of Indian Oil Corporation
Technical analysis of Indian Oil Corporation involves evaluating price movements and trading volumes to forecast future price movements. Technical analysis depends on charts and statistical indicators. analysts use various techniques, such as trend analysis, chart patterns, and technical indicators like moving averages or relative strength index (RSI), to identify potential buying or selling opportunities for Indian Oil Corporation.
The main goal of technical analysis of Indian Oil Corporation share price is to predict future price movements based on historical data and market psychology, helping investors make informed decisions about when to enter or exit trades. So, bellow we are explaining Various techniques as of 29th April 2024 for technical analysis of Indian Oil Corporation.
Price action
Price action and price level of Indian Oil Corporation (As of 29th April) | |||
Price action | Daily Timeframe | Weekly Timeframe | Monthly Timeframe |
Candlestick | Continuous Bullish | Continuous Bullish | Continuous Bullish |
Chart Pattern | Inverted Head and Shoulder | Inverted Head and Shoulder | Continuous Bullish |
Price Support Level | 172-173 | 162-165 | 153-155 |
Price Level | 176 is Current price | 52 weeks High 196.8 | 52 weeks low 81.4 |
As of April 29th, Indian Oil Corporation (IOC) has exhibited noteworthy trends in its price action and price levels across different timeframes. Let’s delve into the data table provided and interpret the implications for investors.
In the daily timeframe, nature of candlestick in Indian Oil Corporation is characterized by a continuous bullish trend. The presence of a breakout candle, closing above the crucial 176 mark, signifies a strong upward momentum. Inverted Head and Shoulder has formed in daily candlestick chat pattern and break the neck line resistance 174 with strong green candle.
This suggests increasing buying interest and positive sentiment among traders in the short term. For traders focusing on daily movements, the price support level lies within the range of 172-173. This range serves as a crucial threshold, providing support during price corrections and acting as a potential entry point for bullish positions.
Transitioning to the weekly timeframe, we observe a consistent bullish sentiment prevailing in Indian Oil Corporation ‘s price action. The emergence of an inverted head and shoulder chart pattern, accompanied by a robust breakout at the 174 level, reinforces this optimistic outlook. Investors with a weekly perspective can find reassurance in the sustained upward trajectory. On the weekly timeframe, investors can rely on the support level spanning 162-165. This level offers stability amidst market volatility and serves as a strategic reference point for managing risk and identifying potential reversals.
Even on a broader scale, Indian Oil Corporation ‘s price action remains bullish on the monthly timeframe. The continuous bullish patterns indicate a robust underlying strength in the stock. This long-term perspective affirms the favourable market sentiment towards IOC, making it an attractive option for investors with a horizon beyond short-term fluctuations. For long-term investors, the support level of 153-155 serves as a solid foundation. This level provides a buffer against significant market downturns and underscores Indian Oil Corporation ‘s resilience amid macroeconomic uncertainties.
Indicators Use for Technical Analysis
Bolinger Band (BB):
Bolinger Band Price level in Indian Oil Corporation (As of 29th April) | |||
| Upper Band | Median | Lower Band |
Bolinger Band | 175.25 | 170.1 | 164.98 |
Bolinger Band (BB) remains analysing a very important price level of Indian Oil Corporation share in daily candlestick. Basically, it consists in three lines on the basis of volatility, when band become widen then volatility increase and when it contracts the stock is more stable. The middle line is 20 day’s simple moving average The upper and lower bands are plotted a distance from the SMA set by a certain number of standard deviations, usually two, above and below the centre line.
Whereas in Indian Oil Corporation 20 SMA price stand at 170, remaining a good support and price breakout above upper band which indicate potential entry with less volatility. The lower band is at 164.98, indicates the potential support for short term.
Moving Average (MA):
Moving Average price level of Indian Oil Corporation (As of 29th April) | ||
Moving Average | 100 Day | 200 Day |
Simple Moving Average (SMA) | 155.49 | 125.09 |
Exponential Moving Average (EMA) | 154.41 | 134.44 |
100 days simple and exponential moving average price are 155.49 and 154.41 which are 12% down from current price but 91% above from 52 weeks low, that indicates the high potential growth probability for long term investors. 100 days EMA and SMA both are indicating a good support for Indian Oil Corporation share price. 200 day moving average price giving long-term support for this stock.
Data Analysis
Open Interest Put Call Ratio of Indian Oil Corporation | ||||
Expiry Date | Put Open Interest | Call Open Interest | PCR OI | Signal |
30/05/2024 | 40492.00 K | 55687.38 K | 0.737 | Neutral |
27/06/2024 | 380.00 K | 1092.25 K | 0.370 | Strong Bullish |
For the May moth expiry, larger amount of open interest created in call side compared to put side. The PCR (put call ratio) indicating the stable price movement for month of May 2024. Meanwhile month of June is very interesting according to the data. PCR of June month is very poor, indicating the potential bullish momentum.
conclusion
In conclusion, Indian Oil Corporation stands as a pillar of India’s energy sector, contributing to the nation’s growth and development. Despite challenges in profitability and debt management, Indian Oil Corporation ‘s diversified operations, global expansion, and strong market sentiment reflect its versatility and potential for investors. Fundamental and technical analyses provide valuable insights into Indian Oil Corporation ‘s financial performance and market outlook, guiding investment decisions.
With a prominent position in the oil and gas industry and a commitment to sustainability, Indian Oil Corporation continues to play a crucial role in India’s quest for energy security and environmental stewardship. Investors should consider the strengths in revenue, market dynamics, and technical price action in candlestick chart while evaluating its investment potential.
FAQs
- What is Indian Oil Corporation?
Indian Oil Corporation (IOC) is a major oil and gas company in India, playing a crucial role in the country’s energy sector.
- What are the main operations of Indian Oil Corporation?
Indian Oil Corporation is involved in refining, pipeline services, marketing petroleum products, and exploration and production of petroleum, natural gas, and petrochemicals.
- Where is Indian Oil Corporation headquartered?
Indian Oil Corporation is headquartered in New Delhi, India.
- How does Indian Oil Corporation contribute to India’s energy landscape?
Indian Oil Corporation is a cornerstone of India’s energy landscape, providing essential fuel for transportation, industry, and domestic use, thereby driving economic growth.
- What are some key subsidiaries of Indian Oil Corporation?
Some key subsidiaries of Indian Oil Corporation include Chennai Petroleum Corporation Limited, IndianOil (Mauritius) Ltd, and IOC Middle East FZE.
- What is the shareholding pattern of Indian Oil Corporation?
The shareholding pattern of Indian Oil Corporation includes Promoter Shareholding (51.50%), FII (Foreign Institutional Investor) Shareholding (8.50%), DII (Domestic Institutional Investor) Shareholding (7.99%), MF (Mutual Fund) Shareholding (2.34%), and Public Shareholding (29.6%).
- How does fundamental analysis help understand Indian Oil Corporation’s financial performance?
Fundamental analysis examines financial ratios like profitability, liquidity, solvency, efficiency, valuation, and growth to assess Indian Oil Corporation’s financial health and performance.
- What is technical analysis, and how does it apply to Indian Oil Corporation’s stock?
Technical analysis involves studying price movements and trading volumes to predict future price movements. It helps investors make decisions about buying or selling Indian Oil Corporation’s stock based on chart patterns and indicators.
- What are some challenges faced by Indian Oil Corporation?
Indian Oil Corporation faces challenges such as fluctuating oil prices, regulatory changes, environmental concerns, and competition from global players.
- What factors should investors consider before investing in Indian Oil Corporation?
Investors should consider factors like the company’s financial performance, market dynamics, regulatory environment, industry trends, and their own investment goals and risk tolerance before investing in Indian Oil Corporation.
