IOC share price: Should you buy this PSU stock after Q4 results, dividend announcement?

IOC share price: Public sector oil marketing and refining company (OMC) Indian Oil Corporation shares will hog the limelight in trade on Friday, May 2, following the announcement of the fourth quarter (Q4) results for the period ended March 2025.

Following the strong Q4 performance and dividend payout, analysts are largely bullish on the company, suggesting possibility of an upside in IOC share price tomorrow.

IOC Q4 Results

The state-run OMC on Wednesday, April 30, posted a 50% year-on-year (YoY) jump in its standalone net profit to ₹7,264.85 crore in the January-March quarter of the financial year 2024-25 (Q4 FY25). The profit stood at ₹4,837.69 crore earnings in the same period a year back.

The bottomline soared due to inventory gains, as the company processed crude oil bought at lower prices and sold products made from it when prices had risen. This also helped offset ₹5,601 crore of losses on LPG sales and lower refining margins.

Revenue from operations fell 1% to ₹2.17 lakh crore in Q4. For the full fiscal FY25, IOC reported a net profit plunging to ₹12,962 crore on a revenue of ₹8.45 lakh crore.

IOC's gross refining margins (GRM) for Q4 stood at $7.85 per barrel, as against $8.39 a barrel in the same period last year.

Market sales rose to 24.601 million tonnes in Q4 and to 100.477 million tonnes in FY25. "FY25 year is the first year we crossed 100 million tonnes," IOC chairman A.S. Sahney said in a post-earnings media briefing.

The company board also declared a final dividend of ₹3 per equity share for FY25.

“Board has recommended a final dividend of 30% for the year 2024-25 i.e. ₹3.00 per equity share of face value of ₹10/- each on the paid-up share capital, subject to the approval of the shareholders at the ensuing Annual General Meeting (AGM) of the Company,” IOC said in a regulatory filing.

IOC is a high dividend paying stock, having a dividend yield of 5.08% in the last 12 months, according to Trendlyne data. The oil PSU company has offered ₹7 dividend during this period.

"The strong performance in the refining business drove the earnings beat. IOC's GRMs more than doubled from $2.9 per barrel in the previous quarter, indicating improved refining profitability. The company's net profit and EBITDA margin also showed significant improvement. Revenue remained stable, but the beat in EBITDA margin and GRMs suggests efficient operations," Seema Srivastava, Senior Research Analyst at SMC Global Securities, said.

Is IOC a stock to buy after Q4 results, dividend?

Improving GRMs and favourable crude oil prices also helped the stock post a good set of numbers, making IOC a good stock to buy in the long term, said Kranthi Bathini of Wealthmills Securities. Additionally, he believes their green energy initiative is a key consideration that investors should keep in mind from a long-term perspective.

Indian Oil Corporation has announced plan to achieve Net Zero operational emissions by 2046. This commitment includes developing a green energy portfolio with 31 GW of renewable energy by 2030, and expanding to 200 GW by 2050. The company has said that is diligently working towards attaining 1 MMT biogas production target by 2030.

Additionally, Bathini is also bullish on the stock due to its high dividend yield.

"The high dividend yield is also one of the key reasons to stay invested in Indian Oil. On average, the long-term dividend yield—some years it goes up above 8%, 9%, even 10%—but consistently, the company gives a 6–7% dividend yield, which is one of the attractive points for Indian Oil. Most people tend to ignore Indian Oil, but it’s the second-largest revenue-generating company after Reliance Industries. Also, with its high dividend yield, even low-risk appetite investors can comfortably stay invested in this stock for the long term," Bathini advised.

Srivastava also sounded bullish on IOC post its Q4 results. She said IOC results demonstrate its resilience and ability to capitalise on favourable market conditions. “The company's strong performance in the refining segment is a positive indicator for its future prospects. With a robust GRM and improving profitability, IOC is well-positioned to navigate the challenges in the oil refining industry,” she added.

Until and unless we completely stop using petrol, OMC stocks won’t be under much pressure, he said. Moreover, they have a lot of property value. Right now, across most Indian Oil outlets, they’re also introducing DC power chargers—so the business is going to thrive, Bathini added.

IOC Shares: Technical Outlook

Commenting on the technical outlook for IOC shares, Anshul Jain, Head of Research at Lakshmishree Investments, said IOC is forming a bullish 78-day-long cup and handle pattern on daily charts, with the neckline resistance placed at 139.85. "A decisive breach and sustain above the 140 mark will confirm the breakout and open the path for a move toward 149, which coincides with the 50% retracement level of the recent weekly decline. The volume pattern during base formation hints at accumulation, supporting the possibility of a sustained breakout once resistance is cleared," Jain added.

(With inputs from PTI)

Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.