Indian Oil Q3 Results: Profit Rises 19%, Missing Estimates
The company's net profit increased 19.2% year-on-year to Rs 5,860.8 crore in the quarter ended December.
Indian Oil Corp.’s quarterly profit rose, missing estimates, amid a jump in revenue and lower tax expenses.
Net profit of the nation’s largest oil refiner increased 19.2% over the year earlier to Rs 5,860.8 crore in the quarter ended December, according to its exchange filing. That compares with the Rs 6,769.7-crore consensus estimate of analysts tracked by Bloomberg.
Its tax expenses fell 43% over the preceding year.
Revenue minus excise duty rose 57% year-on-year to Rs 1,66,788.2 crore, against the Rs 1.6-lakh-crore forecast.
Highlights (YoY)
Operating profit rose 2.6% to Rs 9,862.1 crore.
Other income rose 7.6% to Rs 1375.3 crore.
Total expenditure rose 36.5% to Rs 1,91,067.7 crore.
Operating margin contracted to 5.9% from 9.1%.
Gross refining margin—what a company earns by converting one barrel of crude into fuel—stood at an average of $8.52 a barrel between April and December 2021.
The company’s refining segment was aided by higher benchmark GRMs and improved product spreads. The benchmark Singapore gross refining margin jumped fivefold year-on-year to $6 a barrel in the quarter ended December—the highest in two years. Petrol, diesel and jet fuel spreads surged 342%, 249% and 323%, respectively, over the year earlier.
A rise in crude prices led to inventory gains. Brent crude averaged at $79.7 a barrel in the third quarter compared with $45.26 a year ago.
Higher demand for petrol and aviation turbine fuel, too, helped. Consumption of petrol and ATF rose 2.3% and 32%, year-on-year, while that of diesel fell 3.8%. India’s overall consumption of petroleum products declined fell 3.8% on an annual basis to 53.32 million metric tonnes, according to Petroleum Planning and Analysis Cell data.
Indian Oil’s petrochemicals segment was supported by a stable demand from the essentials sectors such as health and hygiene, e-commerce and food packaging. Petrochemical cracks, however, were impacted by an increase in naphtha and crude oil prices. Polyethylene and polypropylene naptha spreads declined 3% and 16% over the year earlier, while polyvinyl chloride spreads jumped 24%.
Average marketing margin in the third quarter was supported by a reduction in fuel taxes and unrevised retail prices of petrol and diesel since the first week of November 2021. The central government lowered the excise duty in November, followed by a cut in value-added tax by several states.
The company's declared an interim dividend of Rs 4 per share, for which it has fixed Feb. 10 as the record date.
Shares of Indian Oil were trading 1.5% higher on Monday, compared with a 1.4% gain in the benchmark S&P BSE Sensex.
