Indian Oil Corporation fair value — is it overvalued?
The fair value of Indian Oil Corporation (IOC), built from its filed accounts — ten years of results, the method that fits this business, and what today's price already assumes.
The market expects Indian Oil Corporation to carry on much as it has.
At today’s share price, buyers are assuming Indian Oil Corporation grows about 0% a year, forever. Over the last ten years it actually grew about 2% a year. The two are close, so the share price does not need the business to improve or to stumble. It needs it to keep doing roughly what it already does.
What the market is assuming
Worked backwards from today's share price: the growth today’s price implies for Indian Oil Corporation, against what the model assumes.
How to read this. The number on the left is the growth today’s share price quietly takes for granted. The number on the right is what the model actually assumes. When the two are far apart, that gap is the bet you would be taking.
Ten years, in charts
Revenue and earnings per share in ₹, return on equity and leverage as ratios — all from the filed statements.
The numbers behind them
Revenue and net profit as filed, in ₹ crore.
| Year | Revenue | Net profit | Margin |
|---|---|---|---|
| FY2018 | 5,06,428 | 21,346 | 4.2% |
| FY2019 | 6,17,243 | 17,274 | 2.8% |
| FY2020 | 5,76,589 | -1,877 | -0.3% |
| FY2021 | 5,20,237 | 21,762 | 4.2% |
| FY2022 | 7,36,731 | 25,727 | 3.5% |
| FY2023 | 9,51,410 | 11,704 | 1.2% |
| FY2024 | 8,81,235 | 43,161 | 4.9% |
| FY2025 | 8,59,363 | 13,789 | 1.6% |
| FY2026 | 9,01,453 | 43,677 | 4.8% |
How this company gets valued — and why
This business is valued on the cash it is expected to generate, discounted back at its cost of capital — with growth taken from its own ten-year record rather than from guidance.
Discounted cash flowUnderstand this method
- How to Value a Company Using DCF: A Practical Guide for Indian Investors
- Free Cash Flow Explained: The Number Behind Every Valuation
- WACC and the Discount Rate, Explained Simply
- How every one of our energy & utilities stocks is valued
The complete valuation
Unlock the complete valuation report
- ✓Fair value per share — with the full working behind it
- ✓Bull, base and bear cases — and what moves between them
- ✓Every assumption — growth, margins, cost of capital, with sources
- ✓Peer comparison — how rivals are priced on the same measures
- ✓Downloadable PDF report — the full write-up, yours to keep
Compare with peers
The same valuation, run side by side.
Indian Oil Corporation vs Reliance IndustriesState refining and marketing against the largest private refiner.→Indian Oil Corporation vs ONGCRefining and marketing against upstream exploration.→Indian Oil Corporation vs NTPCTwo state-controlled energy majors on very different economics.→Frequently asked
Is Indian Oil Corporation overvalued?
At ₹135 the market is pricing in roughly 0% sustained growth, against the ~2% its own record supports. That is less than it has delivered — on these numbers the market is asking the business for less than its own record, which usually means it doubts the record repeats.
What is the intrinsic value of Indian Oil Corporation?
It is computed from the filed financial statements using the method that fits this business (discounted cash flow), with every assumption shown alongside the result. The per-share figure and the full working are in the report.
Is Indian Oil Corporation a good long-term investment?
Revenue went from ₹5.06 lakh crore to ₹9.01 lakh crore over the period shown, while return on equity moved from 16.9% to 23.1%. Growing scale on a rising return is a very different proposition from growing scale on a falling one.
How much debt does Indian Oil Corporation carry?
Debt to equity stands at 0.31, down from 0.55 at the start of the period — the balance sheet is a core input to the cost of capital used here.
How does FairStocks calculate fair value?
From published financial statements. The method is chosen to fit the business — a bank on excess return, a regulated utility on its rate base, a conglomerate by its parts — and every assumption is shown with its source. When the numbers do not support an estimate, no estimate is published. This is an educational research tool: it reports what the model computed and does not recommend buying or selling anything.
What assumptions are used to value Indian Oil Corporation?
A cost of capital of 11.18%, growth drawn from the company's own record rather than from guidance, and the valuation method that fits the business. All of them are listed in the report, with how much each one moves the answer.