DERIVATIVES

Term Paper
INDIAN OIL CORPORATION(IOC) stock

By
M. Abishek(131245)
Harjas(131313)
Salma Farooqui(131335)
Ramesh
Sachin

 Indian Oil Corporation Ltd., established in the year 1959, is a

Large Cap company operating in Petroleum sector.
Indian Oil Corporation Limited is India's flagship national oil
company with business interests ranging from refining,
pipeline transportation and marketing of petroleum products to
exploration & production of crude oil & gas.
The market capitalization of IOC Rs 80425.93 Cr.

 The Company is the market leader, with an overall share of

(53.1%) among the PSUs.
In 2014 the Companys total income from operations grew by
5.75 % to Rs. 4,88,344.93 Cr. as against Rs. 4,61,779.67 Cr. in
2013.

For the same period, net profit went up by 92.06 % to Rs.

6,966.58 Cr. as against Rs. 3,627.30 Cr. in FY 2013.

Fundamental Analysis
Beta = 0.616
Market Capital =Rs. 80304.0Cr

Operating Ratios:
EPS
Dividend Per
Share
Performance
Ratios:
ROA %
ROE %
Efficiency Ratios:
Asset Turn Over
Ratio
Debtors Turn Over
Ratio
Liquidity Ratios:
Debt to equity
ratio

March 14

28.9
8.70

March 13

20.61
6.20

2.87
11.05

3.31

2.25
8.41

3.34

42.48

42.62

1.22

1.28

Technical analysis
The Relative Strength Index (RSI) is a
momentum oscillator that measures
the speed and change of price
movements. RSI oscillates between
zero and 100. Traditionally, and
according to Wilder, RSI is considered
overbought when above 70 and
oversold when below 30.

By analyzing RSI, we generate following signals:

Overbought and Oversold Zones.
Bullish and Bearish Divergences.
Support-Resistance Zones.
In the chart ,IOCoversold and overbought
levels are shown. 65-70 RSI act as oversold
levels, whereas 25-30 RSI act as overbought
levels. We also see that 50-60 RSI levels act as
resistance for IOC. For each stock, Also note
that, a stock can remain oversold in an uptrend.

Price just got below it's 50-day simple moving average which is a
negative signal. Price just got below it's 20-day simple moving
average which is a negative signal. According to simple moving
average analysis, ioc is in a strong downtrend.

Price just got below it's 50-day simple moving average which is
a negative signal. Price just got below it's 20-day simple moving
average which is a negative signal. According to simple moving
average analysis, ioc is in a strong downtrend.

 The fall in Brent crude oil prices is

definitely a boon, which depends
largely on imported crude for its
needs.

Option Strategies Used

when viewpoint is Moderately Bullish
Short put
Covered Call
Bull Spread Strategy using call

 The deregulation of diesel prices along with declines in

oil prices is expected to reduce fuel under- recoveries
to around Rs 85,000 crore this fiscal compared to Rs
140,000 crore in 2013-14.
IOC's proposed investment of Rs 5,300 crore in setting
up an LPG import facility at Paradip in Odisha and
laying pipelines. IOC board in its meeting on January
29 approved laying of a 1,150 km oil pipeline from
Paradip to Hyderabad at a cost of Rs 2,789 crore. "IOC
has been constructing a 15 million ton per annum
capacity refinery at Paradip, which will be
commissioned in 2015. The new plant will raise IOC's
refining capacity by nearly 25 per cent and will also
improve the overall complexity of its refining capacity.
We expect it to boost margins for IOC, and hence
these earnings will improve on commissioning of new
refinery at Paradip. These expansion plans are now
bringing its stock in focus.

 The reduction in under-recoveries will lower IOC's

borrowing needs. IOC had already reported a decline in
borrowings to Rs 62,000 crore at end-September 2014
from Rs 83,200 crore at end-March 2014. So we can
expect the borrowings to decrease further as underrecoveries fall.
In addition to all these, IOC is also setting up a
polypropylene project at Paradip at a cost of Rs Rs 3,150
crore by 2017-18.
The Indian Oil Corporation-Adani Gas Pvt Ltd joint venture
announced that it has won a contract for the purpose of
implementing the City Gas Distribution (CGD) project in
Ernakulam which is one of the 14 locations in India where
the Petroleum and Natural Gas Regulatory Board (PNGRB)
intends to engage in CGD project. The licence has been
given to IOC-Adani by PNGRB for offering piped gas to
about 5 lakh residents in the district as well as nearby
areas in 24 months for an estimated cost of Rs 150 crore.