Indian Oil Corporation Ltd is Rated Buy

Current Rating and Its Significance

MarketsMOJO currently assigns Indian Oil Corporation Ltd a 'Buy' rating, reflecting a positive outlook on the stock’s potential for investors. This rating indicates that the stock is expected to outperform the broader market over the medium term, supported by strong fundamentals and attractive valuation metrics. The rating was revised from 'Strong Buy' to 'Buy' on 29 December 2025, with the Mojo Score adjusting from 81 to 74. Despite this change, the current 'Buy' status confirms the stock remains a favourable investment opportunity within the oil sector.

Here’s How the Stock Looks Today

As of 21 January 2026, Indian Oil Corporation Ltd continues to demonstrate robust financial health and growth prospects. The company’s market capitalisation remains in the largecap category, reflecting its significant presence in the oil sector. The Mojo Score of 74.0 and the corresponding 'Buy' grade indicate a solid overall performance, balancing quality, valuation, financial trends, and technical factors.

Quality Assessment

The company holds a 'good' quality grade, underscoring its strong operational performance and consistent profitability. Indian Oil Corporation Ltd has exhibited healthy long-term growth, with net sales increasing at an annual rate of 14.63% and operating profit expanding at an impressive 28.19%. The latest quarterly results for September 2025 reinforce this strength, with profit after tax (PAT) reaching ₹7,817.55 crores, a remarkable 105.8% growth compared to the previous four-quarter average. Additionally, the operating profit to interest ratio stands at a robust 7.16 times, highlighting efficient management of financial obligations. The company’s PBDIT for the quarter was ₹16,245 crores, marking a record high.

Valuation Perspective

Indian Oil Corporation Ltd’s valuation is currently rated as 'very attractive'. The company’s return on capital employed (ROCE) is 10.6%, which, combined with an enterprise value to capital employed ratio of just 1.1, suggests the stock is trading at a discount relative to its peers’ historical valuations. This valuation appeal is further supported by a price-to-earnings-to-growth (PEG) ratio of 0.2, indicating that the stock’s price growth is modest compared to its earnings growth potential. Moreover, the stock offers a high dividend yield of 5%, providing investors with a steady income stream alongside capital appreciation potential.

Financial Trend and Returns

The financial trend for Indian Oil Corporation Ltd is positive, reflecting sustained growth and improving profitability. Over the past year, the stock has delivered a total return of 21.51%, outperforming many peers in the oil sector. Profits have risen by 48.6% during the same period, signalling strong earnings momentum. Despite a slight year-to-date decline of 4.30%, the medium- and long-term trends remain encouraging, with six-month and three-month returns at +5.50% and +3.41% respectively. This performance underscores the company’s resilience amid market fluctuations.

Technical Outlook

From a technical standpoint, Indian Oil Corporation Ltd is rated as 'mildly bullish'. The stock’s recent price movements show moderate upward momentum, supported by institutional investors who hold 37.7% of the company’s shares. Institutional ownership often reflects confidence in the company’s fundamentals and can provide stability to the stock price. The daily price change of +0.54% on 21 January 2026 further indicates positive investor sentiment.

Market Position and Peer Comparison

Indian Oil Corporation Ltd is among the top 1% of companies rated by MarketsMOJO across a universe of over 4,000 stocks, highlighting its exceptional standing. The company’s large market capitalisation and strong operational metrics place it favourably within the oil sector. Its valuation discount relative to peers, combined with superior profit growth and dividend yield, makes it an attractive option for investors seeking exposure to the energy space.

What This Rating Means for Investors

For investors, the 'Buy' rating on Indian Oil Corporation Ltd suggests a favourable risk-reward profile. The company’s strong quality metrics indicate reliable earnings and operational stability, while the very attractive valuation points to potential upside as the market recognises its intrinsic value. Positive financial trends and a mildly bullish technical outlook further support the case for investment. The combination of a healthy dividend yield and solid profit growth makes the stock suitable for both income-focused and growth-oriented portfolios.

Investors should note that while the rating was updated on 29 December 2025, all financial data and returns referenced here are current as of 21 January 2026. This ensures that the analysis reflects the latest market conditions and company performance, providing a comprehensive and timely perspective for decision-making.

Risks and Considerations

Despite the positive outlook, investors should remain mindful of sector-specific risks such as fluctuations in crude oil prices, regulatory changes, and geopolitical factors that can impact the oil industry. Additionally, short-term market volatility may affect stock price movements. However, Indian Oil Corporation Ltd’s strong fundamentals and valuation cushion provide a degree of resilience against such uncertainties.

Conclusion

Indian Oil Corporation Ltd’s current 'Buy' rating by MarketsMOJO reflects a balanced assessment of quality, valuation, financial trends, and technical factors. The company’s strong growth trajectory, attractive valuation, and positive market sentiment make it a compelling choice for investors seeking exposure to the oil sector. With all data current as of 21 January 2026, this rating offers a reliable guide for those considering adding the stock to their portfolios.

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