Current Rating and Its Significance
The Strong Buy rating assigned to Indian Oil Corporation Ltd indicates a high conviction in the stock’s potential for delivering superior returns relative to its peers and the broader market. This rating is based on a comprehensive evaluation of four key parameters: Quality, Valuation, Financial Trend, and Technicals. Investors can interpret this as a recommendation to consider the stock favourably within their portfolios, given its robust fundamentals and attractive market positioning.
Quality Assessment
As of 28 December 2025, Indian Oil Corporation Ltd maintains a good quality grade. The company demonstrates healthy long-term growth, with net sales expanding at an annualised rate of 14.63% and operating profit growing even more impressively at 28.19%. These figures underscore the company’s operational efficiency and ability to scale its business sustainably. Additionally, the company’s return on capital employed (ROCE) stands at a solid 10.6%, reflecting effective utilisation of capital to generate profits.
Valuation Perspective
The valuation grade for Indian Oil Corporation Ltd is classified as very attractive. Currently, the stock trades at an enterprise value to capital employed ratio of just 1.1, signalling a discount relative to its historical averages and peer group valuations. This undervaluation is further supported by a low PEG ratio of 0.2, indicating that the company’s price is reasonable 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 prospects.
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- - Fundamental Analysis
- - Technical Signals
- - Peer Comparison
Financial Trend and Profitability
The financial trend for Indian Oil Corporation Ltd is currently positive. The latest quarterly results for September 2025 highlight significant growth, with profit before tax excluding other income (PBT LESS OI) reaching ₹10,459.38 crores, a remarkable 168.7% increase compared to the previous four-quarter average. Similarly, the profit after tax (PAT) for the quarter stood at ₹7,817.55 crores, up 105.8% over the same period. The operating profit to interest ratio has also improved, reaching a high of 7.16 times, indicating strong earnings relative to debt servicing costs. These metrics demonstrate the company’s improving profitability and financial health.
Technical Outlook
From a technical standpoint, Indian Oil Corporation Ltd is rated as mildly bullish. Despite a slight dip of 0.68% on the day of 28 December 2025, the stock has shown resilience with positive momentum over the medium term. It has delivered a 3-month return of +10.34%, a 6-month return of +9.47%, and a year-to-date gain of +17.34%. Over the past year, the stock has appreciated by 16.10%, reflecting steady investor confidence. The technical indicators suggest a favourable trend, supporting the Strong Buy rating.
Institutional Confidence and Market Standing
Institutional investors hold a significant 37.7% stake in Indian Oil Corporation Ltd, signalling strong confidence from knowledgeable market participants who typically conduct rigorous fundamental analysis. This level of institutional ownership often correlates with greater stock stability and informed price discovery. Furthermore, Indian Oil Corporation Ltd ranks among the top 1% of all companies rated by MarketsMOJO, securing the 3rd position among large caps and 18th across the entire market universe of over 4,000 stocks. This elite ranking reflects the company’s superior overall performance and market reputation.
Summary for Investors
In summary, Indian Oil Corporation Ltd’s Strong Buy rating as of 22 December 2025 is well supported by its current fundamentals as of 28 December 2025. The company exhibits strong quality metrics, very attractive valuation, positive financial trends, and a mildly bullish technical outlook. For investors, this rating suggests that the stock is positioned favourably for both capital appreciation and income generation, making it a compelling consideration within the oil sector and large-cap universe.
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Performance Recap
As of 28 December 2025, Indian Oil Corporation Ltd’s stock performance reflects its strong fundamentals. The stock has delivered a 1-year return of 16.10%, outperforming many peers in the oil sector. Its consistent growth in net sales and operating profit, combined with a high dividend yield and attractive valuation multiples, make it a standout choice for investors seeking exposure to the energy sector. The company’s ability to generate robust profits while maintaining a healthy balance sheet further enhances its investment appeal.
Looking Ahead
Investors should consider that the Strong Buy rating is based on a holistic view of the company’s current financial health, market valuation, and technical momentum. While the oil sector can be subject to volatility due to global commodity price fluctuations and geopolitical factors, Indian Oil Corporation Ltd’s strong institutional backing and operational efficiency provide a buffer against such risks. Monitoring quarterly earnings and market conditions will remain important for investors to assess ongoing performance.
Conclusion
Indian Oil Corporation Ltd’s current Strong Buy rating by MarketsMOJO, updated on 22 December 2025, reflects a well-rounded investment case supported by solid quality, attractive valuation, positive financial trends, and encouraging technical signals as of 28 December 2025. For investors seeking a large-cap oil sector stock with a blend of growth and income potential, Indian Oil Corporation Ltd presents a compelling opportunity.
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