Maharatna PSU Oil & Gas Stock Gives Better Returns Than Sensex, Nifty, FDs; Should You Buy?

IOCL Share Price Today: Shares of Maharatna PSU oil marketing company (OMC), Indian Oil Corporation Limited (IOCL), have outperformed BSE Sensex and Nifty 50 in last one month amid softening of crude oil prices.

The company is also planning to expand its five units at Gujarat refinery in Vadodara in the coming months, reported Times of India. As per TOI report, the recent expansion would help the company in boosting refinery efficiency, increase petrochemical production and improve product quality to meet future fuel specifications.

According to stock market experts, IOCL, being the largest refiner in India, is actively driving the expansion and enhancing petrochemical capacities and focusing on energy transition projects. Falling brent crude oil prices over the past three months are further likely to benefit oil and market companies (OMCs) like IOCL.

Brent crude oil price

According to Marketwatch, brent crude oil prices have declined over 2.78% since January 2025. Crude oil prices, recovered from their lows on Wednesday, and surged 0.66% to $72.87 a barrel by 10:27 GMT (3:50 pm IST). According to Reuters, U.S. West Texas Intermediate crude futures rose 28 cents, or 0.4%, to $69.28 a barrel at 10:15 GMT. Despite high oil prices, brent crude oil prices are still lower than their yearly high mark of $81-82 per barrel in January. Soft crude oil prices are likely to benefit OMCs like IOCL. According to experts, brent crude oil price is likely to decline in the coming months.
"We lower our FY26 crude estimate to USD 70/bbl (from USD 75/bbl) due to the unwinding of OPEC+ voluntary supply cuts (2.2 mbpd from April), continued strong non-OPEC+ supply, and expectations of a Russia-Ukraine peace deal," said Antique Stock Broking Limited.

IOCL Share price today

IOCL shares closed 1.45% lower at Rs 129.15 per share on BSE on Wednesday. Indian Oil Corporation's market capitalisation stood at Rs 1,82,375.79 crore today. The stock value has declined 5.6% year to date (YTD), but has appreciated by 8.94% in last one month which is better than Nifty, Sensex performance in last one month. Meanwhile, banks offer an interest rate between 2.9% to 4.9% on fixed deposits for one month tenure.

IOCL share price outlook

Amid sustained crude weakness and healthy marketing margins, OMCs are likely to perform well in the coming months. "Sustained crude weakness should support healthy marketing margins, more than offsetting near-term refining softness and LPG losses. With strong auto-fuel margins and a GRM recovery (already at USD 4.3/bbl), the outlook for OMCs remains positive," said Antique Stock Broking in its analysis on 19 March, 2025.

Analysts view

Antique Stock Broking has initiated a 'Buy' call with a target price of Rs 172 per share. The brokerage has also highlighted that the post-budget stock correction has left valuations highly attractive at 3.9x-4.5x EV/EBITDA (adjusted for investments). IOCL share price value has declined over 5.76 year to date (YTD).

Due to the company's emphasis on expansion and addition plan, PhillipCapital, has also initiated a buy rating for the stock. "We initiate coverage on IOCL with a BUY rating and target of Rs 160, considering its massive, invaluable infrastructure, and modest valuations. At CMP, markets are heavily undervaluing IOCL's capabilities in conceiving and implementing mega projects that can change the country's energy landscape. The stock trades at FY27 P/E of 7x and P/BV of 0.87x, while our target implies a PE of 9x and P/BV of 1.1x," said PhillipCapital in its report released last week.