Indian Oil Q3 Results: Profit Jumps Over Four Times, Margin Expands
Indian Oil’s net profit jumped more than four times sequentially to Rs 2,339 crore in the quarter ended December.
Indian Oil Corporation Ltd.’s third-quarter profit rose more than four times and its operational performance met estimates, aided by higher sales volume and inventory gains.
Net profit jumped to Rs 2,339 crore from Rs 563 crore in the quarter-ended September, the oil marketer said in an exchange filing. That, however, missed the Rs 2,488-crore consensus estimate of analysts tracked by Bloomberg.
Revenue rose 11.6 percent to Rs 1,24,615 crore, in line with the Rs 1,24,459-crore estimate. Its gross refining margin—what the refiner earns for converting every barrel of crude into fuel—stood at $4.09 per barrel compared with $1.3 a barrel in the preceding quarter, Bloomberg data showed.
That comes when Brent Crude prices rose. The Asian benchmark for oil averaged around $62.4 a barrel during the October-December period compared with $62.12 a barrel in the three months ended September. Usually, an uptick in crude oil price leads to inventory gains as oil marketers that bought stock at lower prices can sell the refined fuel through retail outlets at higher rates.
Indian Oil reported an inventory gain of Rs 1,608 crore in the third quarter compared with an inventory loss of Rs 8,523 crore a year ago, Chairman Sanjiv Singh said in a press meet.
But Mayuresh Joshi, head of equity research at William O’Neil India, sounds cautious. There will be “inherent pressure” on demand dynamics and realisations of petrochemicals business as crude prices are trading lower currently, he told BloombergQuint. “The GRMs will remain only in this range in the near term.”
Meanwhile, Indian Oil’s earnings before interest, tax, depreciation and amortisation also jumped 86 percent over the preceding quarter to Rs 6,650 crore in the October-December period. Its operating margin expanded to 5.3 percent from 3.2 percent in the July-September quarter.
Indian Oil Q3 Earnings Highlights From Sanjiv Singh’s Press Meet
- Foreign exchange loss of Rs 182 crore versus a gain of Rs 2,084 crore in the year-ago period.
- Exploring the possibility of importing crude from Russia’s Rosneft and are close to finalising the deal.
- Don’t expect refinery shutdowns in the financial year ending 2020-21.
- Air India owes Rs 2,500 crore to Indian Oil at present.
Shares of the oil retailer fell 1.7 percent after the earnings announcement compared the Nifty Index’s 0.7 percent decline.
