IOC share price jumped 3% today: 4 reasons why

Indian Oil Corporation climbed 3 per cent in Tuesday's trade after reporting better-than-expected March quarter results and a second increase in petrol and diesel prices in less than a week. In addition, the board of IndianOil today approved the formation of a 50:50 joint venture with M11 Energy Transition at an estimated project cost of Rs 1,063.60 crore for setting up a 100 KTPA HEFA-based Sustainable Aviation Fuel project at Paradip. The scrip was also in focus after the company's board declared a dividend of Rs 1.25 per share, subject to shareholders' approval at the ensuing Annual General Meeting.

Following the developments, the stock rose 2.88 per cent to hit a high of Rs 135.65, trimming its year-to-date fall to 19 per cent. 

MOFSL said IOC's Q4 beat was likely led by inventory gains, adding that the oil marketing company's Ebitda came in 30 per cent above its Q4 estimate at about Rs 21,940 crore, up 62 per cent YoY.

For the quarter, IOC booked LPG under-recovery of Rs 240 crore compared with Rs 960 crore in Q3. Marketing and refining throughput came in line with MOFSL estimates. Other income stood above estimates, while interest and depreciation stood below estimates, MOFSL said on Tuesday in a flash note. For now, the brokerage has kept its 'Neutral' rating on the stock intact.

Earlier in the day, OMC stocks, including IOC, were up as petrol and diesel prices were hiked by 87 paise to Rs 98.64 per litre and diesel 91 paise to Rs 91.58 in New Delhi. The move is marginally positive for oil marketing companies (OMCs), which were making losses of about Rs 750 crore daily on auto fuel marketing. 

Brokerages such as Systematix and Nomura had earlier suggested a likelihood of a series of auto fuel price hikes. Nomura noted that OMCs were required a fuel price hike of 25 per cent litre hike in auto fuel prices to breakeven, with Systematix saying the Rs 3 per litre hike in fuel prices last week was the beginning of a series of hikes, not the end of one. 

MOFSL noted that IOC had a cumulative negative net buffer of Rs 23,100 crore due to the under-recovery on LPG cylinders. The MoP&NG, through letters dated on October 3 and October 24, 2025, approved a compensation of Rs 14,490 crore to the company for under-recoveries on the sale of domestic LPG up to March 31, 2025, and those expected up to March 31, 2026. 

"The amount will be released in 12 equal monthly installments, with accruals recognized monthly starting November 2025. Accordingly, three equal monthly instalments totaling Rs 3,620 crore have been recognized in Q4," MOFSL said.