Merrill Lynch downgrades IOC to neutral

SINGAPORE, Nov 2: Merrill Lynch said it had downgraded the shares of state-run refiner Indian Oil Corp.

to ''neutral'' from ''buy'' and slashed its forecast for the company's earnings for fiscal 2007 by 40 percent.

In a research report dated Nov. 2, Merrill Lynch said it was cutting its 2007 profit forecast to 34 rupees per share from 57.2 rupees per share. The stock downgrade also reflected limited upside following its recent gains.

''Rating downgrade as fair value offers just 4 percent upside. IOC is up 26 percent from July 2006 when we set our price objective of 556 rupees. From its current level the stock offers just 4 percent upside to our revised fair value of 531 rupees and 8 percent to earlier price objective of 556 rupees,'' it said.

REUTERS