Operating Margin - Indian Oil Corporation Ltd (NSE:IOC)

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Price: 163.67 INR 1.16%

Market Cap: 2.3T INR

4.1%

Current

Average

10.5%

Industry

Operating Margin represents how efficiently a company is able to generate profit through its core operations.

Higher ratios are generally better, illustrating the company is efficient in its operations and is good at turning sales into profits.

Operating Margin

4.1%

Operating Profit

352.6B

Revenue

8.7T

Operating Margin Across Competitors

Country		Company	Market Cap	Operating Margin
IN		Indian Oil Corporation Ltd NSE:IOC	2.3T INR	4%
IN		Reliance Industries Ltd NSE:RELIANCE	21.1T INR	12%
US		Marathon Petroleum Corp NYSE:MPC	57.4B USD	5%
US		Phillips 66 NYSE:PSX	57B USD	2%
US		Valero Energy Corp NYSE:VLO	51.3B USD	3%
PL	O	Orlen SA PSE:PKN	623.3B CZK	10%
PL		Polski Koncern Naftowy Orlen SA WSE:PKN	108.7B PLN	10%
JP		ENEOS Holdings Inc TSE:5020	3T JPY	0%
IN		Bharat Petroleum Corporation Ltd NSE:BPCL	1.6T INR	5%
FI		Neste Oyj OMXH:NESTE	14.1B EUR	1%
TW		Formosa Petrochemical Corp TWSE:6505	464.9B TWD	1%

Indian Oil Corporation Ltd
Glance View

Economic Moat

None

Market Cap

2.3T INR

Industry

Energy

In the vast and dynamic landscape of the Indian energy sector, Indian Oil Corporation Ltd. (IOCL) stands as a formidable giant, weaving its intricate network to fuel the nation's growth. Rooted in a vision that began in 1959, the company has grown into one of India’s largest commercial enterprises, establishing a robust presence across the oil and gas value chain. At the heart of Indian Oil's operations is its mammoth refining capacity. With numerous refineries strategically spread across the country, IOCL transforms crude oil into a wide array of valuable petroleum products including gasoline, diesel, kerosene, and liquefied petroleum gas (LPG). These products form the lifeblood of transportation and industry in India, ensuring that millions of vehicles are fueled and homes are powered each day. Beyond refining, the company’s extensive pipeline network efficiently transports these products, crisscrossing the subcontinent like rivers of energy, ensuring a steady supply meets the ever-growing demand. Indian Oil's prowess, however, is not limited to traditional energy avenues. As market dynamics shift, IOCL has ventured into greener pastures, investing in renewable energy sources and innovative technologies. The company has been rolling out initiatives in natural gas infrastructure, including city gas distribution and liquefied natural gas (LNG) systems, positioning itself for a future where energy sustainability is as crucial as availability. Aside from its core operations, Indian Oil capitalizes on a robust retail network, one of India’s most expansive, allowing the company to engage directly with millions of customers every day through fuel stations and consumer gas connections. This direct line to the consumer not only drives revenue but also bolsters brand loyalty, forming a critical pillar in IOCL’s diversified business strategy. As it continues to diversify and innovate, Indian Oil Corporation remains a pivotal player in India's journey towards energy independence, adeptly navigating challenges while fueling progress.

View IOC Analysis

IOC Intrinsic Value

What is Intrinsic Value?

Economic Moat is a concept popularized by Warren Buffett to describe a company's durable competitive advantage. It represents the 'moat' that protects a company from competitors and helps it sustain profitability over the long term. Our analysis of the past 10 years showed that companies with a wide economic moat significantly outperformed the market, delivering +645% returns compared to +189% for the S&P 500.

Our research into Economic Moat performance spans the past 10 years and focuses on companies with a wide economic moat. For this analysis, we calculated the average stock price returns of these companies, comparing them to the performance of the S&P 500 index over the same period.

The results were compelling: wide moat stocks achieved a remarkable +645% average return, compared to +188% for the broader market. This difference highlights the long-term benefits of investing in businesses that can maintain their market position and pricing power over time.

Note: This research does not account for survivorship bias. Past performance is not indicative of future results.

Determining whether a company has an economic moat requires both a deep dive into financial metrics and a qualitative assessment of its competitive position. Our analysts conduct a rigorous evaluation that focuses on identifying structural advantages that enable a company to sustain profitability and defend its market share over the long term.

The process begins with an analysis of a company’s historical financial performance. We assess how consistently the company has generated returns above its cost of capital and whether those returns have been stable or improving. However, financial performance alone doesn’t reveal the full picture. To understand the sources of these advantages, we evaluate five key drivers of economic moats:

Network Effect: We analyze whether the value of a company’s product or service grows as its user base expands. Platforms like payment systems or marketplaces benefit from this self-reinforcing.

Switching Costs: We assess whether customers face significant costs or disruptions when switching to a competitor’s product or service. High switching costs create customer stickiness and provide pricing power.

Intangible Assets: Strong brands, patents, and regulatory licenses can protect a company’s market position by creating barriers for competitors or enabling premium pricing. For example, a well-recognized consumer brand may command higher customer loyalty and margins.

Efficient scale: Occurs when a market is optimally served by one or a few players, making it unprofitable for new entrants to compete. This typically happens in industries with high fixed costs or geographic constraints, such as utilities or pipelines.

Cost Advantage: Companies with structural cost advantages can produce goods or services at a lower cost than their competitors, enabling them to offer competitive pricing or maintain higher margins. These advantages often arise from economies of scale, superior supply chain management, or proprietary technology. Firms like Walmart leverage their massive scale to negotiate better terms with suppliers, allowing them to undercut competitors on price.

By examining these factors in combination with a company’s financial performance and market positioning, we classify each company into one of three categories:

This rigorous evaluation ensures that our moat ratings are both comprehensive and reliable, giving investors the tools they need to make well-informed, long-term decisions.

The AI Assistant may sometimes provide inaccurate information.

Make your own investment decisions or consult a licensed financial advisor.

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Indian Oil Corporation Ltd
NSE:IOC