Indian Oil Q2 Results: Profit Slumps 93%, Margin Contracts
Indian Oil Corporation Ltd.'s quarterly profit declined to Rs 180.01 crore for Q2 FY25, as the company faces a significant contraction in gross refining margins and lower revenues.
Indian Oil Corp.'s profit slumped during the second quarter of fiscal 2025, missing analysts' estimates. The oil marketing company's bottom line stood at Rs 180.01 crore during the three months ended Sept. 30, 2024, a fall of 93.2% from the preceding quarter, according to its stock exchange notification.
Analysts polled by Bloomberg had estimated a Rs 2,262-crore net profit. The profit was cushioned by the exceptional gains of Rs 1,157.30 crore following a favourable Supreme Court order on VAT input tax credit under the Gujarat VAT Act 2005.
The average gross refining margin of the company in the first half of the fiscal stood at $4.08 per barrel, marking a 68.9% drop from the same period a year ago.
IOCL Q2 FY25 Results Highlights (Standalone, QoQ)
Revenue down 9.6% to Rs 1,73,847.58 crore (Bloomberg estimate: Rs 1,82,529 crore).
Ebitda down 56% to Rs 3,772.42 crore (Bloomberg estimate: Rs 9,802 crore).
Ebitda margin narrowed to 2.2% versus 4.5% (Bloomberg estimate: 5.4%).
Net profit is down 93% to Rs 180.01 crore (Bloomberg estimate: Rs 2,262 crore).
What Impacted Revenues
The 10% downtick in revenues was driven by the petroleum product segment, where revenues fell 9% quarter-on-quarter, due to lower demand in the monsoon season.
Petrochemical segment revenues remained stable on sequential basis at Rs 6,813.36 crore.
Gross Refining Margins
Indian Oil's financial performance was mainly impacted due to a weak refining segment. Gross refining margins of the company stood at $4.08 per barrel in Q2 FY25, compared to $13.12 a year ago.
The refining margins stood at $2.97 per barrel after offsetting inventory losses. Inventory losses basically indicate that the company bought crude oil at a higher price whereas, the prices during the quarter remained low.
LPG Losses
Indian Oil's cumulative net negative buffer on LPG sales stood at Rs 8,870.11 crore as of Q2 FY25. This buffer has widened from the Rs 4000 crore values as of Q1 FY25.
The company has been seeing LPG losses due to the Ministry of Petroleum and Natural Gas of India mandating oil marketing companies to sell LPG cylinders at a subsidised retail price, which is higher than the costs the company incurs for the same.
