Indian Oil
Renewable Energy & EV Infrastructure:
Expanded renewable energy capacity to 243 MW, with a target of 31 GW by 2030.
Commissioned 3,598 new EV charging stations in FY 23-24, taking the total to 9,059.
Hydrogen initiatives include a 10 KTPA Green Hydrogen electrolyzer facility at Panipat and the deployment of India’s first hydrogen fuel cell buses.
Refining & Production:
Daily crude oil processing of 1.6 million barrels, with a gross refining margin (GRM) of $12.05/barrel, down from $19.52/barrel YoY due to global volatility.
Highest-ever petrol production at 12,555 TMT, reflecting an 8.5% YoY increase.
Throughput in refineries stood at 73.3 MMT, while product sales reached 97.55 MMT. Pipeline throughput achieved a record 98.63 MMT.
Infrastructure Developments:
Commissioned key projects, including RLNG infrastructure at Barauni and Paradip refineries.
Expanded crude basket from 247 to 253 grades, enhancing operational flexibility.
Fuel & Retail Network:
Increased retail fuel stations to 37,697, capturing a 45% share of PSU fuel outlets.
LPG network expanded to 12,883 distributors, with record LPG pipeline throughput surpassing 95.8 MMT.
Sustainable Initiatives & Green Fuel:
Achieved 15% ethanol blending in petrol and introduced India’s first ETHANOL 100 fuel at 400 outlets.
Established India’s first commercial-scale Sustainable Aviation Fuel (SAF) plant at Panipat, supporting the SAF blending mandate.
Financial Performance:
Total revenue for FY 23-24 was ₹8.66 lakh crore, with EBITDA at ₹74,182 crore.
PAT stood at ₹39,619 crore, delivering a strong ROCE of 20.17%. Operating cash flow was ₹68,097 crore.
IndianOil’s strategic investments in hydrogen, biofuels, and EV infrastructure, alongside its strong refining and retail network, position the company to capitalize on India’s energy transition while maintaining robust financial performance.
Capex projects
Crude oil and gas reserves
the company has proven and developed reserves of 5053 TMT of crude oil
and gas about 6413 million cubic meters
the company has proven and undeveloped reserves of 7092 TMT of crude oil
and gas about 15737 million cubic meters
Assumptions:
Conversion: 1 TMT of crude oil is approximately equal to 7.3 barrels of oil equivalent (BOE).
Current market price: Assuming a crude oil price of $80 per barrel (as of September 2024) and a natural gas price of $3 per million British thermal units (BTU).
BOE reserves:
Proven and developed: 5053 TMT * 7.3 BOE/TMT ≈ 37,000 BOE
Proven and undeveloped: 7092 TMT * 7.3 BOE/TMT ≈ 51,800 BOE
Total BOE: 37,000 + 51,800 ≈ 88,800 BOE
Estimated value:
Crude oil portion: 88,800 BOE * $80/BOE ≈ $7.1 million
Natural gas reserves: 15737 million cubic meters
Conversion: Assuming 1 cubic meter of natural gas is approximately equal to 37.3 BTUs
Total BTUs: 15737 million cubic meters * 37.3 BTUs/cubic meter ≈ 587 billion BTUs
Estimated value: 587 billion BTUs * $3/BTU ≈ $1.76 billion
Therefore, the estimated value for the natural gas portion of the reserves is approximately $1.76 billion.
Total estimated value: $7.1 million (crude oil) + $1.76 billion (natural gas) ≈ $1.77 billion
Investment in public companies that are traded
Name of companies Market cap value
| GAIL-2.50% | 143100 | 3577 |
|---|---|---|
| CPCL-51.89% | 13353 | 6928 |
| Petronet-7.84% | 37600 | 2947 |
| ONGC-4.93% | 375000 | 18847 |
| Oil India-12.50% | 50000 | 6250 |
| total | 38549 |
Crude Throughput & Petrochemical Processing
- Crude Processing: The company achieved its highest ever crude throughput of 73,308 Thousand Metric Tonnes (TMT) in 2023-24, surpassing the previous best of 72,408 TMT in 2022-23.
- Naphtha Processing: The Panipat Naphtha Cracker processed 3,111.8 TMT of naphtha, exceeding its previous record.
- Pipeline Network: Operating over 19,500 Km of pipelines, with an annual throughput capacity of 124.4 MMT for oil and 48.73 MMSCM per day for gas. They expanded this network by adding 2,180 Km of new pipelines.
2. Petrochemical Investments
- Petrochemical Intensity Increase: Plans to raise the Petrochemical Intensity Index from 6.1% to 15% by 2030, with investments of ₹1,20,000 Crore. Projects worth ₹30,000 Crore are under implementation and another ₹90,000 Crore under feasibility study.
3. Energy Transition & Renewables
- Battery Space Collaborations: Formed a joint venture with Phinergy Ltd. (Israel) for aluminum-air battery technology and partnerships with Sun Mobility (battery swapping) and Panasonic Energy (battery manufacturing).
- Renewable Energy Targets: The company aims to install 31 Gigawatts (GW) of renewable energy capacity, from solar, wind, and hydroelectric sources, to diversify its energy portfolio.
4. LNG & Gas Sales
- LNG Terminal Operations: Operated a 5 MMTPA LNG terminal at Kamarajar Port, Ennore. Gas sales reached 6.5 MMT in 2023-24, marking a 49% growth over the previous year.
- Natural Gas Pipelines: Continued expansion in the natural gas sector with 1,300 Km of new pipelines.
5. Retail & Infrastructure Expansion
- Retail Outlet Expansion: Commissioned 1,260 new retail outlets, 322 CNG stations, and 40 CBG stations in 2023-24, for a total of 37,472 retail outlets, 2,110 CNG stations, and 85 CBG stations. They also solarized 10,655 retail outlets, increasing their solar capacity to 165.57 MWp.
- EV Infrastructure: Installed 3,601 new EV charging stations, reaching 9,059 in total, with 16 battery-swapping facilities added.
6. LPG Sales & Market Share
- LPG Business: Achieved sales of 14.17 MMT, growing 2.5% over the previous year, and maintaining over 45% market share in India. New bottling plants were commissioned to support this growth.
- Aviation Fuel Market: Maintained a leadership position with a 58% market share and 4.8 MMT sales.
7. Petrochemicals Market
- Market Position: The company is India’s second-largest petrochemicals producer, with sales reaching 3.1 MMT, its highest performance to date.
- Capacity Expansion: It targets a capacity increase to 13.6 MMT by 2030. Notable projects include new ethylene glycol and polypropylene units and a ₹61,077 Crore petrochemical complex in Paradip.
8. International Expansion & Trade
- International Partnerships: Signed agreements with Abu Dhabi National Oil Company (ADNOC) and TotalEnergies for long-term LNG supply. The company also exports petroleum products to neighboring countries like Bangladesh, Sri Lanka, and Nepal.
- LNG Imports: Importing 65.18 MMT of crude oil in 2023-24 from diverse regions and planning future LNG imports from countries like Qatar.
9. Sustainability & Future Outlook
- Net-Zero Commitment: The company is heavily investing in transitioning to sustainable energy, aiming for net-zero operations. They plan to increase their share of India’s energy mix to 12.5% by 2050, with renewables and biofuels making up a quarter of that.
- Energy Demand in India: The company’s plans align with India’s growing energy demand, which increased by 7.3% in 2023. The Indian government’s focus on renewable energy and natural gas growth supports these initiatives.
- The company wants to increase its refining capacity from 80.8 to 107 units. This represents an estimated increase of 32.4% in refining capacity. By 2030
- Additionally, the company plans to expand its pipeline network from 20,000 to 30,000 kilometres. This translates to an estimated increase of 50% in pipeline coverage. By 20230
- The company seems to be increasing its refinery capacity at 6% per year and wants to increase refining margins by incoperating petroleum value added products
- The long piupelines gives it a advantage over other companies including PSU
- The government support will act as a great stabilizing factor however inflexeblity of the government and socialist tendency example the subsidized gas of the government which the company is yet to receive compensation are limiting factors it remains to be seen how this will affect the future
- Increase in renewables and other energy sources the success remains monitorable over the long term as they have to compete with other established players
- It is noted the company has enormous strengths in brands and distribution
- The exploration and discovery part of the company will continue to supply about 10 % of the company
Risk Factors
- The ability of the company to process different grades of crudes is a monitorable thing in the future
- Further contingent liabilities that might force the company to pay up in case any adverse event occurs
- Expansion of cpcl and Indian oil Cauvery basin refinery is facing local protests and headwinds
- Expansion of electric vehicles and the solutions to be provided the company retail outlets are key monitorable
- The company is vulnerable to any accidents or terrorist attacks that can impact production
- Unwanted privatization can be a hindrance so is sovereign interference social programs like gas schemes by the government can increase the trade receivables
- New technologies like hydrogen and other renewables can be a threat as adoption and implementation can be a challenge
- Oil demand might not rise parallel to economic growth as both of them get more divorced as renewable energies and transportation catches on
- ESG emphasis is a threat
- Valuation is attractive the question is can it grow parallel to the economy or lag behind the general economy
- The company has a lot of contingent liabilities
- Huge Capex runover is a threat
- Execution of Petro chem addition and value addition can be adverse
Disclosure-Not invested might invest if PE is below 4 to 5
