Indian Oil is gaining out of a churning of portfolios by market players.

Today the scrip jumped to its 52-week high of Rs 368 on sustained buying interest from FIIs. It, however, moved off the high to Rs 360.30, still higher than its yesterday's close by 9.12% (at 12:48 IST).

Volumes of 4 lakh Indian Oil (IOCL) shares were notched up on BSE by then. The stock has now risen 53% from Rs 235 on 30 April 2003.

Oil refinery stocks are being propelled higher on the bourses on the improved prospects for these companies. Besides, players are now shifting their funds from the out-of-favour tech sector to other lucrative areas like energy, banking and commodity stocks.

Some anticipation over the company's results is also pushing up the stock. With BPCL turning out solid results, the same is expected of IOCL. The company is also expected to declare a huge dividend of around Rs 40 per share (400% on a face value of Rs 10 per share) for FY 2002-03.

Fundamentally, the company looks very strong. IOCL has 10 refineries and 22,000 petrol pumps, representing 42% of the total refining capacity and 53% of petroleum product sales in India. IOC owns 6,523 km of crude and product pipelines in India including eight of the 11 product pipelines. Pipeline decontrol is underway and that should give IOC huge profits in future.

The company's huge investment of Rs 4,280 crore in shares of oil companies is also expected to earn IOCL huge dividend. IOCL has invested in oil companies like ONGC, Gas Authority of India (GAIL), IBP, Chennai Petroleum and Bongaigaon Refinery at historically low prices. All these companies have posted record profits and have announced huge dividends.

For the third quarter ended 31 March 2003, the company recorded a 37% increase in net profit to Rs 776.56 crore (Rs 567.79 crore) on a 10% rise in net sales to Rs 31,212.23 crore (Rs 28,416.87 crore).

As on 31 March 2003, the government held 82.03% stake in IOCL, while the public and institutions held 3.70% and 4.94%, respectively.