Indian Oil Corporation Ltd Management Discussions

1. Industry Structure and Developments

1.1 ECONOMIC PERFORMANCE AND OUTLOOK

The global economy remained resilient during 2025 despite operating in an environment of heightened geopolitical uncertainty, rising trade fragmentation, and persistent financial vulnerabilities. Global GDP growth remained steady at around 3.4% in 2025, unchanged from 2024, supported by resilient domestic demand in several major economies, technology-led investments, and accommodative financial conditions, including a weaker US Dollar.

Advanced economies recorded modest growth of around 1.9% in 2025, marginally higher than 1.8% in 2024, while growth in Emerging Market and Developing Economies (EMDEs) eased slightly to 4.4% from 4.5%. Among major economies, the United States grew by 2.1%, moderating from 2.8% in 2024 due to tighter financial conditions and slower consumption, although labour markets remained resilient. The Euro Areas growth improved to 1.4% from 0.9%, supported by easing inflation and stronger domestic demand. Chinas growth remained at 5.0%, despite continued weakness in the property sector, subdued consumer confidence, and rising trade-related disruptions from tariffs and shifting global supply chains.

India continued to remain the fastest-growing major economy in the world, with GDP growth rising to 7.7% in 2025-26 from 7.1% in the previous year. Growth was supported by strong domestic consumption, sustained public infrastructure investments, resilient services activity, improving manufacturing momentum, and continued policy support.

Inflation continued to ease globally, moving closer to central banks target levels in most major economies. The easing price environment enabled several major central banks, including the Federal Reserve System and the European Central Bank, to initiate interest rate cuts.

However, the global economy entered 2026 amid rising fragility following the outbreak of conflict in the Middle East in late February 2026, which emerged as a major downside risk to global growth. Under the IMFs baseline scenario, global growth is projected at 3.1% in 2026 and 3.2% in 2027, with the 2026 forecast revised downward by 0.2 percentage point from the January 2026 WEO Update. Global headline inflation is expected to rise to 4.4% in 2026 before easing to 3.7% in 2027, reflecting renewed energy-driven price pressures.

Under an adverse scenario involving prolonged energy price shocks, the IMF estimates global growth could slow to 2.5% in 2026, with inflation rising to around 5.4%. In a more severe scenario involving significant damage to regional energy infrastructure, global growth could fall to around 2% in both 2026 and 2027, while inflation could exceed 6%, with emerging and developing economies facing disproportionately higher impacts.

Despite increasing global uncertainties, India is expected to remain the worlds fastest-growing major economy, with growthprojectedat6.6%inFY2026-27,supportedbyresilient domestic demand and relatively lower tariff exposure. At the same time, investments in artificial intelligence, digital infrastructure, and data centres are emerging as important structural drivers of future economic activity and electricity demand growth, while supply chain diversification, energy security, and domestic industrial capabilities are becoming increasingly central to global economic and energy policy.

As one of Indias leading energy companies, IndianOil continues to contribute significantly to the nations economy through value creation, employment generation and reliable energy supply. During FY 2025-26, the Companys EBTDA (Earnings before Taxes, Depreciation & Amortisation) and Employee Benefit Expenses together amounted to 76,538 Crore, representing an estimated 0.24% contribution to Indias Gross Value Added (GVA).

As on March 31, 2026, IndianOil provided direct employment to 29,650 employees and engaged over 1,23,000 contract workers, supporting livelihoods and economic activity across the country.

It is noteworthy that the above estimate is conservative in nature & reflects only the Companys direct economic & employment contribution and does not capture the wider multiplier effect generated through its extensive value chain of dealers, transporters, contractors, vendors and service providers. Through uninterrupted energy supply and efficient operations, IndianOil continues to support Indias economic growth and energy security.

1.2 GLOBAL ENERGY SECTOR

The global energy landscape during 2025 was shaped by a combination of strong underlying demand growth, accelerating electrification, and continued clean energy deployment, even as volatility and supply chain vulnerabilities persisted. Global energy demand grew by around 1.3% in 2025, moderating from 2% growth in 2024 levels. Importantly, demand expanded across all major energy sources, though at markedly different rates.

A defining feature of the year was the accelerating shift toward electrification. Global electricity demand grew by nearly 3% in 2025, more than twice the pace of overall energy demand growth. Growth was broad-based across buildings, industry, and transport, while rapidly rising electricity consumption from data centres, digital infrastructure, and artificial-intelligence-driven computing emerged as an increasingly important structural driver, particularly in advanced economies. emissions slowed in 2025, rising Global growth in energy-related CO 2

by around 0.4%, reaching a new absolute high. Weather-related factors, including colder winters in advanced economies and weaker hydropower output in some regions, played a material role in shaping emissions outcomes during the year. Overall, 2025 reflected an energy system in transition rather than transformation, characterised by strong absolute demand growth, rapid electrification, record clean-energy deployment, and continued reliance on conventional fuels to ensure system reliability and affordability.

Outlook: Shifting Energy Dynamics in 2026

The global energy environment entered 2026 amid heightened geopolitical uncertainty and renewed energy security concerns following escalating tensions in the Middle East and disruptions around the Strait of Hormuz, a key route for global crude oil and LNG trade. The resulting supply risks triggered sharp volatility across oil, gas, and refined product markets, alongside rising freight and insurance costs, highlighting vulnerabilities in global energy supply chains and reinforcing the importance of supply diversification and resilient energy infrastructure.

At the same time, the evolving environment intensified the policy focus on balancing energy security, affordability, and decarbonisation objectives. While elevated hydrocarbon prices reinforced the near-term role of conventional fuels in maintaining supply stability, they also accelerated momentum toward renewable energy, electrification, storage technologies, and energy efficiency. Rising electricity demand from digitalisation, artificial intelligence, electric mobility, and industrial electrification is also expected to drive higher investments in power generation, grids, storage, and flexible energy infrastructure globally. These trends are likely to shape the strategic direction of the global energy sector in the coming years, with resilience, diversification, and low-carbon competitiveness emerging as central priorities.

Energy Dynamics in 2026

Geopolitical Uncertainty

Heightened geopolitical uncertainty and renewed energy security concerns

Supply Risks

Supply risks triggered sharp volatility across oil, gas, and refined product markets.

Policy Focus

The evolving environment intensified the policy focus on balancing energy security, affordability, and decarbonisation objectives

Renewable Energy

Elevated hydrocarbon prices accelerated momentum toward renewable energy, electrification, storage technologies, and energy efficiency.

Electricity Demand

Rising electricity demand from digitalisation, artificial intelligence, electric mobility, and industrial electrification is expected to drive higher investments.

1.2.1 Oil Market

Global oil demand growth slowed further in 2025, rising by around 0.8 million barrels per day (mb/d), to 104.4 mb/d, well below the pre-pandemic average growth of 1.4 mb/d. Demand growth remained concentrated in non-OECD economies, particularly in Asia, led by aviation and petrochemical feedstocks, while road transport fuel demand remained largely flat due to improving vehicle efficiency, higher biofuel blending, and expanding electric vehicle adoption. Petrochemical feedstock demand growth also moderated sharply.

Looking ahead, global oil demand is projected to decline by around 420 kb/d year-on-year to 104 mb/d in 2026. The reversal in demand outlook has been driven largely by the Iran conflict, which has intensified supply disruptions, elevated energy prices, and weakened global economic activity.

On the supply side, global oil output increased by approximately 3.2 mb/d in 2025, reaching above 106 mb/d. Non-OPEC+ supply grew by 1.8 mb/d in 2025, led by offshore projects, oil sands, tight oil and NGLs, mostly from the Americas. OPEC+ supply grew by 1.3 mb/d in 2025, largely due to unwinding of production cuts from OPEC+, especially Saudi Arabia. The resulting oversupply conditions and rising inventories exerted downward pressure on prices, with Dated Brent averaging around USD 69 per barrel in 2025 compared with USD 81 per barrel in 2024, with prices largely remained range-bound for most of the year.

However, market conditions shifted sharply in early 2026 following disruptions around the Strait of Hormuz, a critical chokepoint handling nearly 20 mb/d of global oil trade. The disruption constrained tanker movements, reduced Gulf exports, and temporarily curtailed global oil supply by an estimated 8-9 mb/d in March 2026, prompting emergency stock releases by IEA member countries.

This sharp reassessment of supply risk triggered an abrupt price response. Brent crude rose from around USD 71 per barrel in late February to an average of USD 103.7 per barrel in March, marking one of the largest monthly increases on record. Prices continued their ascent in April, with Dated rising as high as USD 145/bbl. Prices briefly eased following a temporary ceasefire agreement linked to the reopening of the Strait of Hormuz.

While price volatility is expected to remain elevated in the near term, the trajectory of global oil markets in 2026 will remain highly dependent on the duration of disruptions, the restoration of shipping flows through the Strait of Hormuz, and the response of non-OPEC supply.

Global refining margins improved during 2025 following a weak start to the year, supported by lower crude prices, relatively resilient product demand, tighter inventories, and unplanned refinery outages. Margins strengthened further in early 2026 as geopolitical disruptions, shipping constraints, and lower refinery runs tightened refined product markets, particularly for middle distillates.

1.2.2. Gas Market

Global natural gas demand growth slowed significantly in 2025, rising by around 1.2%, or nearly 55 billion cubic meters (bcm), to approximately 4,217 bcm, compared with growth of 2.5% in 2024. Demand growth remained uneven across regions, driven mainly by colder winter conditions in advanced economies and continued oil-to-gas switching in the Middle East power

Integrated Annual Repor t 2025-26 sector. Incremental demand growth was concentrated in the United States, the European Union, and the Middle East, while Asia-Pacific demand remained broadly flat amid elevated LNG prices, rapid renewable energy deployment, and improved nuclear availability. Industrial gas demand remained subdued, while consumption in the buildings sector increased sharply.

Global gas markets remained relatively tight during the first half of 2025 before easing in the second half as LNG availability improved. Global LNG production increased by nearly 7%, or around 38 bcm, largely during the second half of the year. LNG investment activity remained strong, with over 90 bcm per annum of liquefaction capacity receiving final investment approvals in 2025, making it the second strongest year for LNG project sanctions after 2019. The United States accounted for more than 80 bcm per annum of approved capacity, while over 130 bcm per annum of long-term LNG contracts were signed globally during the year, reflecting continued focus on supply security and portfolio diversification.

Natural gas prices remained elevated and volatile through much of 2025 due to tight supply conditions, European storage refill requirements, and geopolitical uncertainties. European TTF prices averaged just below USD 12/MBtu in 2025, around 9% higher than in 2024, while Asian spot LNG prices (JKM) also averaged above USD 12/MBtu. However, prices softened during the second half of the year as stronger LNG supply growth, improved renewable generation, and milder weather conditions eased market tightness. In the United States, Henry Hub prices averaged around USD 3.6/MBtu, supported by stronger domestic demand and higher storage injections.

Structural shifts in global gas trade continued during the year. Russian pipeline gas deliveries to the European Union declined by nearly 90% between 2021 and 2025, while the European Union announced plans to fully phase out Russian gas imports by 2027, creating additional market space for alternative LNG suppliers. Gas market reforms also progressed across Asia, including infrastructure access reforms in China and tariff rationalisation measures in India.

Global gas and LNG markets entered a period of heightened uncertainty in 2026 following the escalation of the West Asia crisis. Disruptions around the Strait of Hormuz and damage to regional LNG infrastructure temporarily removed nearly 20% of global LNG supply from the market, causing sharp volatility in Asian and European gas markets. Global LNG production declined by around 8% year-on-year in March 2026, while benchmark prices surged to their highest levels since the 2022-23 energy crisis, with TTF averaging around USD 18/MBtu and JKM nearing USD 21/MBtu. Beyond the immediate disruption, damage to LNG infrastructure and delays in major expansion projects have weakened the medium-term supply outlook, delaying the expected easing of global LNG markets by at least two years. While expanding North American LNG capacity may partly offset supply losses, global gas markets are expected to remain highly sensitive to geopolitical developments and shipping disruptions, reinforcing the importance of diversified supply sources, long-term LNG contracts, and resilient energy infrastructure.

1.2.3. Global Petrochemical Market

The global petrochemical sector remained under pressure in 2025 amid weak demand growth, persistent oversupply, and margin compression. Demand growth for petrochemical feedstocks such as naphtha, LPG, and ethane slowed to around 1.2% in 2025 from 2.6% in 2024, impacted by weaker manufacturing activity, trade disruptions, and reduced US feedstock exports to China. At the same time, continued capacity additions in China and the Middle East further oversupplied markets for products such as ethylene and propylene, exerting pressure on utilisation rates, prices, and margins. Naphtha-based producers in Europe and parts of Asia were particularly affected due to higher feedstock costs and weaker competitiveness relative to gas-based producers. Developments during the year reinforced the importance of feedstock flexibility, refining integration, and higher-value petrochemical products.

In 2026, the Middle East conflict further disrupted feedstock availability and supply chains, increasing price volatility and strengthening the competitiveness of producers with access to lower-cost gas-based feedstocks, particularly in North America.

1.2.4. Global Electric Mobility

The global electric vehicle (EV) market sustained strong growth momentum in 2025, with electric car sales surpassing 20 million units, reflecting year-on-year growth of over 20%. China remained the dominant market, where electric vehicles accounted for more than half of all new car sales. The penetration was supported by intense domestic competition, expanding model availability, and competitive pricing. In the European Union, electric car sales increased by around 30% following policy adjustments and renewed incentives in key markets. In contrast, electric vehicle sales in the United States declined marginally after the withdrawal of federal tax incentives and easing of fuel economy compliance requirements. India also recorded strong growth, with total EV sales reaching a record 2.3 million units, driven by over 75% growth in electric car sales.

Electrification trends extended beyond four-wheeler passenger vehicles, with rapid growth in electric buses, two- and three-wheelers, and medium- and heavy-duty vehicles, particularly across China and emerging Asian markets. At the same time, the broader EV ecosystem continued to strengthen, supported by declining battery costs, manufacturing scale efficiencies, expanding charging infrastructure, and intensifying competition, all of which contributed to improving affordability and wider adoption of electric mobility solutions.

1.2.5. Low-Carbon Energy

Despite geopolitical and financing pressures, global low-carbon energy investment reached a record USD 2.3 trillion in 2025, up 8% from 2024, driven mainly by electrified transport, renewables, grids and storage. Electrified transport remained the largest segment, attracting nearly USD 900 billion in EVs and charging infrastructure, while renewable power investment reached around USD 690 billion, led by solar PV deployment. Investments in electricity grids and battery storage also accelerated to support rising electricity demand, grid resilience and integration of variable renewable energy. However, investment in emerging areas such as hydrogen and CCS remained modest amid cost and policy uncertainties.

Global renewable capacity additions exceeded 800 GW in 2025, including over 600 GW of solar PV and around 160 GW of wind capacity. China accounted for more than 60% of global additions, while the EU, the US and India also recorded strong growth, with India emerging as one of the fastest-growing renewable markets. Reflecting the structural shift in the power sector, renewables and nuclear together contributed nearly 60% of incremental global energy demand growth during the year, while renewable electricity generation surpassed coal-fired generation globally for the first time. Solar and wind generation together met almost all incremental growth in global electricity demand, underscoring the increasing competitiveness and scale of renewable technologies.

Bioenergy and biofuels continued to expand steadily, while investment in hydrogen, CCS and other emerging low-carbon fuels remained selective and policy dependent. Overall, the 2025 energy transition reflected a maturing but expanding low-carbon ecosystem increasingly shaped by affordability, storage, system integration and grid resilience alongside decarbonisation goals.

1.3. INDIAN ENERGY SECTOR

Indias energy sector in 2025-26 continued to be shaped by strong demand fundamentals alongside evolving supply-side and geopolitical challenges, reinforcing the countrys pivotal role in global energy markets and highlighting the importance of energy security. As the worlds third-largest energy consumer, India continues to witness a steady rise in energy demand, supported by sustained economic growth, rapid urbanisation, industrial expansion, and improving living standards. Fossil fuels continue to dominate the countrys energy mix, accounting for nearly 93% of the total primary energy supply. Primary energy demand increased by approximately 1.0% year-on-year in 2025, reflecting a moderation from the long-term average annual growth of 3.6% over the past decade. Looking ahead, India is expected to remain one of the largest contributors to global energy demand growth, with its primary energy requirement projected to nearly double by 2050. Meeting this expanding demand will require contributions from all major energy sources, although renewable energy is expected to record the fastest growth, driven by supportive policy measures, declining technology costs, and Indias long-term energy transition and climate commitments.

Indias Oil sector in 2025-26 was shaped by a combination of steady domestic demand growth, high import dependence, and evolving global trade disruptions. Domestic crude oil production declined to 28 MMT from 28.7 MMT, while crude oil imports rose marginally by 0.9% year-on-year to 245.4 MMT, pushing import dependence to 88.7%. This continued reliance on imports left the sector exposed to external supply disruptions and volatility in global trade flows. During the latter part of the year, disruptions to key shipping routes in West Asia led to higher freight costs, longer vessel turnaround times, and increased reliance on alternative sourcing routes, impacting import logistics and refining economics.

The refining sector remained a key strength, with installed capacity of 258.1 million metric tonnes per annum (MMTPA), maintaining its position as the second-largest refining hub in Asia and fourth globally. Refinery throughput rose to 272.1 MMT, reflecting a 1.3% increase supported by sustained domestic consumption. However, external trade dynamics were impacted, with petroleum product imports declining by 7.9% to 46.8 MMT and exports falling by 5.6% to 61.4 MMT, reflecting rerouting of cargoes, increased regional competition, and logistical constraints from geopolitical tensions affecting key maritime corridors.

Domestic petroleum product consumption rose by 1.7% to 243.2 MMT, indicating continued demand resilience, albeit at a moderating pace compared to previous years. Within transport fuels, Motor Spirit demand increased by 6.5% to 42.6 MMT, supported by strong passenger vehicle growth and a continued shift towards petrol-based mobility. High-Speed Diesel demand grew by 3.6% to 94.7 MMT, driven by increased freight movement, infrastructure activity, and strong commercial vehicle sales, which expanded by 12.6% year-on-year. Demand was further supported by higher agricultural activity, aided by policy measures such as the reduction in GST on tractors, contributing to 23% growth in tractor sales.

Aviation turbine fuel (ATF) consumption reached a record 9.16 MMT, increasing 2.0% year-on-year, and exceeded pre-pandemic levels by over 8%, despite slower growth in domestic air traffic due to fleet availability constraints. Liquefied Petroleum Gas (LPG) consumption continued its upward trajectory, growing 6.0% to 33.2 MMT, supported by increasing adoption of cleaner fuels and expansion in commercial usage. Bitumen demand rose by 3.0% to 8.84 MMT, reflecting sustained infrastructure development. In contrast, naphtha consumption declined by 9.9% to 11.74 MMT, reflecting feedstock optimisation by refiners, shifts towards alternative petrochemical inputs, and evolving global supply-chain dynamics.

The natural gas sector witnessed a temporary correction in 2025-26, with consumption declining by an estimated 3.9% to around 68.5 bcm, reversing the strong expansion observed over the previous two years. This moderation was primarily driven by elevated spot LNG prices during H1 2025-26, which reduced gas consumption in price-sensitive sectors. Domestic gas production also declined by roughly 3.6%, while higher global prices and logistical constraints contributed to a reduction in LNG imports. City Gas Distribution (CGD) remained a key growth segment, supported by network expansion and increasing adoption of CNG in transport. Despite the near-term softness, the medium-term outlook remains constructive, with demand expected to recover strongly as prices ease and new LNG supply comes online.

The petrochemical sector remained resilient during 2025-26 despiteachallengingglobalenvironmentmarkedbyoversupply, weak global spreads, and margin pressures. Domestic demand remained resilient across packaging, automotive, infrastructure, and consumer goods sectors, while the sector continued to advance refinery-petrochemical integration and capacity expansion projects. Indias petrochemical industry is set for significant long-term expansion, underpinned by strong domestic demand, supportive government policies, and sustained capital investment.

Indias clean energy transition continued to advance across multiple fronts during 2025-26. Renewable energy capacity additions reached a record pace, significantly strengthening the countrys non-fossil power base and increasing the share of clean energy in total electricity generation. Electric vehicle adoption continued strong momentum across two-wheelers, passenger vehicles, and commercial segments, supported by expanding public charging infrastructure. Ethanol blending in petrol achieved the 20% national target by March 2026, a significant policy milestone. Progress under the National Green Hydrogen Mission and the National Critical Minerals Mission advanced Indias longer-term low-carbon objectives and strategic supply chain development. Taken together, these developments reinforce Indias defining energy characteristic: the simultaneous growth of conventional and low-carbon energy systems along a broad and accelerating dual pathway.

2. Navigating a Changing Energy Landscape: Opportunities and Challenges

The energy sector is undergoing significant change across demand patterns, technologies and policy frameworks. Electrification is emerging as an important driver of future energy consumption, with global electricity demand projected to increase by over 40% by 2035. At the same time, geopolitical developments continue to influence commodity markets, trade flows and energy security considerations.

In India, petroleum product demand has grown at a CAGR of 5.6% over the last five years, while renewable energy capacity additions have accelerated rapidly, taking non-fossil sources to over 50% of installed power capacity. The simultaneous growth of conventional and low-carbon energy systems is creating opportunities across the energy value chain, while also introducing new risks and competitive challenges.

Opportunities

India Emerging As A Key Driver Of Global Energy Demand Growth

Strong Long-Term Growth in Transport and Aviation Fuels

Petrochemical Demand Expansion and Import Substitution Opportunity

Expansion of Gas-Based Economy and LNG Infrastructure

Renewable Energy, Electrification, and Emerging Energy Ecosystems

Growth in Shipping, Marine Fuels and Energy Trade Infrastructure

Digitalisation, AI and Data Centre-Led Energy Demand

Policy Support for Energy Transition and Critical Minerals

Electrification of Mobility and Emerging Mobility Ecosystems

2.1. OPPORTUNITIES

India Emerging as a Key Driver of Global Energy Demand Growth

India is expected to remain the largest contributor to incremental global oil demand over the next decade, with demand projected to increase from about 5.5 mb/d to nearly 8 mb/d by 2035. The countrys overall energy requirement is expected to more than double by 2050, supporting long-term opportunities across refining, marketing, pipelines, petrochemicals, natural gas, aviation fuels and downstream infrastructure.

Strong Long-Term Growth in Transport and Aviation Fuels

Rising vehicle ownership, expanding road infrastructure, increasing freight movement and growing economic activity continue to support growth in gasoline and diesel consumption. Simultaneously, strong growth in domestic and international air travel is positioning India among the worlds fastest-growing aviation markets, supporting long-term demand for aviation turbine fuel, airport infrastructure and associated energy services.

Petrochemical Demand Expansion and Import Substitution Opportunity

India remains dependent on imports for nearly 45% of its petrochemical requirements, while per capita consumption at around 15 kg is approximately one-third of the global average indicating significant headroom for import substitution and demand growth. Domestic petrochemical capacity is projected to reach about 55 million tonnes by 2035, with the market expected to expand to USD 375 billion by 2027 and nearly USD 1.25 trillion by 2040, supporting investments in integrated refinery-petrochemical complexes.

Expansion of Gas-Based Economy and LNG Infrastructure

Indias objective of increasing the share of natural gas in the energy mix continues to support investments across LNG sourcing, regasification, pipelines, city gas distribution and downstream infrastructure. With gas demand projected to approach 135 bcm by 2035, diversified LNG sourcing and long-term supply arrangements assume greater importance. Industrial fuel switching, CGD expansion and adoption of LNG and hydrogen in freight transport provide additional growth opportunities.

Renewable Energy, Electrification, and Emerging Energy Ecosystems

India added a record 51 GW of renewable energy capacity and 3.7 GW of large hydro capacity during FY 2025-26, taking total renewable capacity to 274.7 GW, including 150.3 GW solar and 56 GW wind. Renewable generation increased 22% to 310 TWh, raising its share in total generation from 13.9% to 16.8%. Against the target of over 600 GW by 2032, opportunities continue to emerge across renewable power, transmission, storage and integrated energy solutions.

Electrification of Mobility and Emerging Mobility Ecosystems

EV registrations exceeded 2.5 million units during FY 2025-26, with penetration increasing to 8.5% from 7.7% in the previous year. Electric two-wheelers accounted for nearly 58% of total EV sales, while electric passenger vehicles recorded approximately 86% growth. Public charging infrastructure expanded to more than 27,000 stations, supporting opportunities across charging networks, battery ecosystems, mobility solutions and multi-energy retail formats.

Policy Support for Energy Transition and Critical Minerals

The National Green Hydrogen Mission, with an outlay of

19,744 Crore, has advanced through green ammonia auctions, hydrogen projects at major refineries, incentives supporting 3,000 MW per annum of electrolyser manufacturing, certification mechanisms and hydrogen hubs. The National Critical Minerals Mission has introduced a 7,280 Crore programme for rare earth magnets and a 1,500 Crore recycling scheme, strengthening domestic supply chains across emerging industries.

Digitalisation, AI and Data Centre-Led Energy Demand

Rapid growth in artificial intelligence, cloud computing, digitalisation and data localisation is driving investments in data centres and digital infrastructure, creating incremental electricity demand and opportunities across power supply, cooling fuels, lubricants, gas-based backup systems and renewable integration. Adoption of AI, automation and predictive analytics across industrial operations is also improving efficiency, reliability and customer engagement across the energy value chain.

Growth in Shipping, Marine Fuels and Energy Trade Infrastructure

Indias growing trade volumes, expanding port infrastructure and strategic location along major shipping routes continue to support opportunities across marine fuels, LNG bunkering, lubricants and associated logistics infrastructure. Increasing adoption of lower-emission shipping fuels is expected to support demand for LNG, biofuels and green methanol, while recent shipping disruptions have highlighted the importance of resilient storage, port and energy logistics infrastructure.

Threats

Rising Geopolitical Risks and Energy Supply Disruptions

Energy Price Volatility and Margin Uncertainty

Petrochemical Margin Pressure and Global Oversupply

Climate, Weather and System Resilience Risks

Policy, Regulatory and Energy Transition Risks

Critical Mineral and Technology Supply Chain Dependence

Changing Global Trade Flows and Emerging Energy Blocs

High Import Dependence and Supply Security Risks

2.2. THREATS

Rising Geopolitical Risks and Energy Supply Disruptions

Geopolitical tensions, trade fragmentation, sanctions and disruptions across critical energy corridors continue to influence global energy markets. Recent developments in West Asia and around the Strait of Hormuz, through which nearly 20% of global oil and LNG trade flows, highlighted the sensitivity of energy supply chains to geopolitical events, contributing to volatility across crude oil, natural gas, freight and insurance markets.

High Import Dependence and Supply Security Risks

Indias crude oil import dependence has increased to around 88%, while growing gas demand is expected to raise LNG import requirements over the medium term. Dependence on imported crude oil, LNG, petrochemical feedstocks and critical minerals exposes the energy sector to supply concentration risks, currency fluctuations and external market disruptions, increasing the importance of diversified sourcing, resilient logistics infrastructure and long-term supply arrangements.

Energy Price Volatility and Margin Uncertainty

Global energy markets are increasingly characterised by short-term price volatility rather than stable pricing cycles. The correction in Indias gas consumption during H1 2025-26, driven by elevated LNG spot prices, demonstrated the sensitivity of demand to commodity prices. Such volatility can influence procurement strategies, inventory management, project economics and capital allocation decisions across the energy value chain.

Changing Global Trade Flows and Emerging Energy Blocs

The global energy system is witnessing the emergence of regional supply alliances, export controls, sanctions and strategic competition across energy technologies and critical minerals. Increasing emphasis on domestic manufacturing, friend-shoring and energy security may alter global trade flows, investment patterns, technology access and competitive dynamics across energy markets.

Petrochemical Margin Pressure and Global Oversupply

Large-scale petrochemical capacity additions in China and the Middle East continue to exert pressure on global utilisation rates and margins. Naphtha-based producers remain exposed to feedstock cost volatility and competitive pressure from gas-based producers benefiting from lower-cost ethane and LPG feedstocks. Prolonged oversupply conditions may continue to affect profitability across commodity petrochemical value chains.

Critical Mineral and Technology Supply Chain Dependence

The transition toward batteries, renewable energy systems, electrolysers, semiconductors, and digital infrastructure is increasing dependence on critical minerals and advanced technologies. Global supply chains for lithium, cobalt, nickel, rare earths, batteries, and clean energy equipment remain highly concentrated geographically, creating new forms of strategic vulnerability, trade risks, and price uncertainty.

Climate, Weather and System Resilience Risks

Increasing frequency and intensity of heatwaves, floods and other climate-related events present operational and infrastructure risks across the energy value chain. Rising electricity demand for cooling, growing pressure on power systems and weather-related disruptions are increasing the need for resilient infrastructure, energy storage and operational flexibility. Rapid renewable energy expansion also requires continued investment in transmission networks, balancing mechanisms and grid stability.

Policy, Regulatory and Energy Transition Risks

The evolving energy transition is accompanied by stricter environmental regulations, carbon-related trade measures, fuel quality requirements and disclosure obligations. Emerging frameworks relating to emissions, carbon intensity, sustainable fuels, shipping and industrial decarbonisation may increase compliance requirements, influence competitiveness across energy value chains and require additional investments in cleaner technologies and operating systems.

In this evolving environment, integrated energy companies will increasingly need to balance energy security, affordability, operational resilience, and sustainability objectives while maintaining competitiveness across both conventional and emerging energy value chains. IndianOils integrated business model, extensive infrastructure network, diversified portfolio, and ongoing investments across refining, petrochemicals, gas, renewable energy, biofuels, hydrogen, digitalisation, and emerging mobility solutions position your Company to navigate evolving market dynamics while supporting Indias long-term energy security and energy transition objectives.

3. Performance and Strategic Outlook: Advancing a Secure, Accessible and Sustainable Energy Future

Building on the performance achieved during the year, your Companys forward strategy is anchored in a structured and balanced framework that addresses the three core imperatives of the evolving energy ecosystem - ensuring energy security, enhancing energy availability, and advancing energy sustainability. These priorities are being pursued through coordinated actions across business divisions, supported by digital transformation, operational excellence, and disciplined capital deployment.

3.1. ENHANCING ENERGY ACCESSIBILITY

Indias expanding energy demand, rising urbanisation, industrial growth, and evolving mobility patterns continue to require sustained investments across refining, fuel marketing, pipelines, gas infrastructure, and downstream integration. Your Companys strategy is focused on strengthening nationwide energy accessibility through integrated infrastructure expansion, supply-chain optimisation, multi-energy offerings, and development of future-ready energy ecosystems. Alongside enhancing scale and operational competitiveness, the focus remains on improving logistics efficiency, expanding cleaner fuel availability, and progressively integrating low-carbon and customer-centric energy solutions across the value chain.

3.1.2. Marketing: Expanding Multi-Energy Access

The marketing strategy is centred on ensuring reliable energy access across geographies, expanding cleaner and diversified energy offerings, and progressively transforming the retail network into an integrated multi-energy mobility ecosystem. Your Companys approach increasingly combines conventional fuels, cleaner mobility solutions, digital services, and non-fuel offerings through a customer-centric platform designed to support Indias evolving mobility and energy requirements.

Expansion and modernisation of the retail network continue to strengthen last-mile energy access across urban, rural, highway, and emerging demand centres, supported by a network of over 42,800 retail outlets. Strategic initiatives such as Transformative Retail Outlets (TROs), expansion of CPCLs Sooper branded outlets, and development of enhanced highway infrastructure

3.1.1. Integrated Refining System: Scale, Competitiveness and Integration

As Indias energy demand continues to expand alongside rising industrialisation, mobility, and urbanisation, your Company is pursuing a calibrated strategy to strengthen domestic refining and downstream infrastructure while improving operational competitiveness, flexibility, and sustainability. Multiple brownfield expansion and integration projects are under implementation across the refining system with the objective of increasing commissioned group refining capacity from 80.75 MMTPA currently to around 98 MMTPA by 2027-28. Operational excellence remains an important strategic focus, with continued alignment of refinery systems toward globally benchmarked standards, including progression toward first-quartile operational performance under internationally recognised benchmarking frameworks. Simultaneously, refinery product slates are being optimised to improve domestic LPG availability, strengthen supply resilience, and support integration with downstream gas and PNG ecosystems. through Apna Ghar facilities and Wayside Amenities are aimed at improving customer experience, outlet productivity, and long-term retail competitiveness.

The retail ecosystem is also being progressively repositioned into integrated mobility and service destinations through expansion of EV charging, CBG dispensing, digital customer engagement platforms, and non-fuel retail offerings.

Non-fuel retail (NFR) remains an important avenue for revenue diversification and customer engagement. Expansion of convenience services, food and retail partnerships, digital integration, and premium highway amenities is expected to support your Companys medium-term objective of scaling NFR revenues to around 1,000 Crore from 257 Crore, while improving outlet monetisation and strengthening customer loyalty.

In LPG, strategic focus remains on improving accessibility, logistics efficiency, and growth across domestic, commercial, and clean mobility segments. Expansion of infrastructure, including the Kandla-Gorakhpur LPG Pipeline, new bottling plants, and supply infrastructure in remote and underserved regions, is expected to improve supply resilience and reduce logistics intensity over the long term. Simultaneously, initiatives are underway to scale Non-Domestic Non-Exclusive (NDNE) packed LPG volumes by nearly 1.5 times and reduce LPG bottling costs by around 30% by F.Y. 2027-28 through automation, digitalisation, throughput optimisation, and logistics rationalisation.

The SERVO lubricants business continues to focus on premiumisation, export expansion, and deeper penetration across Tier 2-4 markets through expansion of the bazaar network, stronger OEM partnerships, and supply-chain optimisation. The Company aims to expand the SERVO bazaar network to around 100,000 counters while increasing the share of premium and value-added lubricant products.

Marine fuels and coastal energy logistics are also emerging as important growth areas. Initiatives such as import of Indias first Very Low Sulphur Fuel Oil (VLSFO) parcel and operational enhancements at strategic coastal facilities are expected to support the medium-term objective of scaling the bunkering business to around 2.8 MMTPA, alongside gradual integration of LNG bunkering and other lower-carbon marine fuel solutions.

3.1.3. Pipelines: Expanding Low-Cost Energy Transport Backbone

The pipeline network remains central to your Companys long-term strategy for building an efficient, reliable, and lower-carbon energy transportation system across the country. Strategic focus continues expanding crude oil, petroleum product, LPG, and natural gas pipeline infrastructure to strengthen supply resilience, reduce logistics costs, improve evacuation flexibility, and enhance connectivity to high-growth demand centres.

Key projects under implementation include the 2,730 km Kandla-Gorakhpur LPG Pipeline through Joint Venture, among the worlds longest LPG pipeline systems, the conversion of the Mundra-Panipat Pipeline linked to refinery expansion, and the Kochi-Kanyakumari-Thoothukudi natural gas pipeline to support southern Indias growing gas demand.

Your Company is simultaneously strengthening storage infrastructure, integrating automation and digital technologies, and adopting energy-efficient systems to improve operational reliability, cost competitiveness, and sustainability. Pipeline infrastructure is also being prepared for emerging fuel ecosystems, including implementation of the Governments CBG blending programme and future multi-fuel transportation requirements.

The long-term pipeline strategy remains focused on network expansion, logistics optimisation, operating cost reduction, and deeper integration with refining, marketing, gas, and clean energy businesses.

3.1.4. Petrochemicals: Driving Integration

Petrochemicals continue to remain a key pillar of your Companys long-term transformation strategy aimed at diversifying revenue streams, enhancing value addition, and improving resilience against evolving transportation fuel demand patterns.

Strategic investments such as the 5,894 Crore Acrylics/ Oxo-Alcohol Complex at Gujarat Refinery, the 153 KTPA Butyl Acrylates complex, and the 260 KTPA Group-III base oil project at Haldia Refinery are expected to strengthen presence across specialty chemicals, premium lubricant base stocks, and high-value downstream products, while supporting import substitution and improving value realisation from refinery streams.

3.1.5. Gas Business: Supporting Transition Fuel Availability

Your Company is progressively expanding its presence across LNG sourcing, trading, regasification, city gas distribution, Auto LNG, and industrial gas markets to build an integrated gas value chain aligned with Indias evolving energy security, affordability, and decarbonisation objectives.

Global LNG sourcing and trading capabilities are being strengthened through diversified pricing arrangements, strategic partnerships, and enhanced trading architecture aimed at improving supply resilience and managing exposure to increasingly volatile global gas markets.

Expansion of the City Gas Distribution (CGD) footprint across residential, commercial, industrial, and transportation segments continues through both standalone operations and joint ventures, supporting wider access to cleaner fuels and strengthening long-term market presence in the gas sector.

FocusisalsobeingplacedonexpansionofLNGandAutoLNG infrastructure to support cleaner mobility solutions for long-haul transportation and heavy commercial vehicles. Your Company aims to scale natural gas sales (excluding captive) to 1.5 times over the medium term, while progressively improving profitability across CGD geographical areas and expanding the Auto LNG retail network.

3.2. ENSURING ENERGY SECURITY

Energy security remains central to your Companys overall business strategy, with continued focus on ensuring uninterrupted availability of critical fuels across the country amid evolving geopolitical, logistics, and supply chain risks. Going forward, IndianOil plans to further strengthen strategic fuel infrastructure, emergency logistics capabilities, inventory management systems, and aviation fuelling infrastructure to enhance supply resilience and preparedness for national and strategic requirements.

3.2.1. Upstream Integration and Resource Diversification

Expansion of domestic and international upstream participation remains an important strategic priority aimed at strengthening long-term energy security and reducing exposure to geopolitical disruptions. Your Company continues to pursue exploration opportunities, asset acquisitions, strategic partnerships, and resource diversification initiatives to build a more resilient and integrated energy value chain.

Your Company aims to scale its upstream production portfolio from around 4.5 MMTOE currently to nearly 11 MMTOE by 2030 through a calibrated mix of portfolio expansion, international opportunities, and strategic collaborations. Strategic developments such as the crude discovery by Urja Bharat Pte. Ltd. in Abu Dhabi and commencement of production from the Jyoti-1 well in Gujarat of IndianOil Upstream Venture Ltd. (Formerly Mercator Petroleum Ltd.), are expected to further strengthen the diversified upstream resource base.

3.2.2. Strategic Diversification and Emerging Businesses

IndianOil is progressively expanding its presence across global trading, shipping, critical minerals, digital infrastructure, specialty industrial products, and emerging energy ecosystems to diversify revenue streams and strengthen long-term business resilience. These initiatives are aimed at positioning your Company as an integrated energy, infrastructure, and technology enterprise capable of navigating the evolving global energy landscape.

Your Company strengthened its international footprint through acquisition of a lubricants blending plant in Nepal by IOML Hulas Lube Pvt. Ltd., marking IndianOils first overseas downstream asset acquisition and supporting expansion across neighbouring and emerging international markets. Simultaneously, development of an integrated trading platform and diversified sourcing architecture is being advanced, with a medium-term aspiration of building a trading portfolio targeting revenues of around USD 10 billion by FY 2027-28. In parallel, opportunities are being evaluated across critical minerals, battery value chains, nuclear energy ecosystems, and data centre-linked digital infrastructure to support Indias long-term energy transition and industrial growth requirements.

To further strengthen supply-chain resilience and logistics security, your Company has also accorded in-principle approval for acquisition of Very Large Gas Carriers (VLGCs) for captive utilisation. This strategic initiative is expected to enhance control over critical LPG logistics, reduce exposure to volatility in global charter markets, strengthen long-term energy security, and support the national objective of increasing Indian-owned and Indian-flagged maritime capacity.

IndianOil is additionally leveraging its extensive infrastructure network to create new value-accretive business opportunities. The agreement to lease spare capacity on its dark optical fibre network to Bharti Airtel reflects the Companys approach toward monetising strategic infrastructure assets while supporting Indias expanding digital connectivity ecosystem. Capabilities are also being strengthened across cryogenic solutions, industrial explosives, and other infrastructure-linked businesses serving strategically important sectors of the economy.

As India increases focus on strategic reserves of crude oil, LNG, and LPG, IndianOil remains well positioned to play an expanded role within the countrys evolving energy security architecture. Your Companys integrated infrastructure network, diversified sourcing capabilities, and operational agility continue to enhance resilience against crude price volatility, geopolitical disruptions, shipping constraints, and currency-related import risks.

3.2.3. Resilient Crude Sourcing: Diversification as a Defence In a year shaped by significant geopolitical volatility, including the conflict in West Asia and disruptions to key shipping routes, IndianOil demonstrated sourcing agility by expanding its crude basket with seven new grades, taking the total to 275 grades sourced from 48 countries. This diversified sourcing capability represents a critical strategic strength, enabling your Company to substitute grades, optimise crude economics, and absorb supply shocks without compromising throughput or product quality.

The ability to process such a diverse crude slate also reflects the technical sophistication of refinery operations and the depth of crude evaluation and procurement capabilities. Going forward, further investments in crude flexibility through refinery configuration upgrades and strategic crude storage will continue to strengthen resilience against geopolitical supply disruptions.

3.3. ADVANCING ENERGY SUSTAINABILITY

IndianOil continued to progress investments across renewable energy, biofuels, compressed biogas, green hydrogen, sustainable aviation fuel and electric mobility during FY 2025-26. Key developments included expansion of the renewable energy programme through Terra Clean Ltd., additional grid connectivity secured for future renewable power integration, commencement of construction of Indias first large-scale 10 KTPA Green Hydrogen Plant at Panipat Refinery and continued growth of the EV charging and network.

Your Company also completed nationwide rollout of E20 fuel, progressed compressed biogas projects across multiple locations and secured ISCC CORSIA certification for Sustainable Aviation Fuel at Panipat Refinery. Alongside these initiatives, efforts continued towards improving energy efficiency, increasing renewable power utilisation and advancing circularity initiatives across operations in line with your Companys commitment to achieve Net-Zero operational emissions by 2046.

For a detailed discussion on your Companys sustainability strategy, energy transition initiatives and environmental performance, please refer to the chapter Sustainability at IndianOil on Page 70 of this Integrated Annual Report.

3.4. ENABLERS: DIGITAL TRANSFORMATION, COST OPTIMISATION AND INSTITUTIONAL CAPABILITY

In an increasingly volatile global energy environment marked by geopolitical uncertainty, supply chain disruptions, rapid technological change, and evolving consumer expectations, IndianOil continues to strengthen the institutional capabilities required to remain agile, competitive, and future-ready. Your Companys long-term strategy is focused on building a digitally enabled, operationally efficient, innovation-driven, and resilient enterprise capable of sustaining growth while supporting Indias evolving energy transition journey.

3.4.1. Digitalisation, AI and Technology Integration

IndianOil is increasing the use of digital platforms, advanced analytics, artificial intelligence and automation across refining, pipelines, marketing, supply chain and customer-facing operations. Ongoing investments in enterprise systems, digital customer ecosystems, operational intelligence platforms and AI-enabled applications are improving planning, monitoring and decision-making across businesses. At the same time, technology deployment is supporting greater operational visibility, process efficiency, asset utilisation and customer responsiveness, while reducing manual intervention across several business processes.

3.4.2. Cost Optimisation and Capital Discipline

IndianOil continues to strengthen cost leadership and capital discipline as foundational pillars of long-term competitiveness and financial resilience. As your Company enters a phase of large-scale investments across petrochemicals, renewable energy, green hydrogen, biofuels, and low-carbon infrastructure, disciplined capital allocation, operational efficiency, and cost optimisation remain central to sustaining profitability and funding future growth.

The Company is implementing structured capital allocation frameworks, balanced scorecard-based project evaluation systems, and asset monetisation initiatives to improve investment efficiency and optimise returns across businesses. Simultaneously, IndianOil is pursuing enterprise-wide cost optimisation initiatives spanning refining, pipelines, LPG operations, logistics, terminalling, and aviation fuelling through automation, throughput optimisation, supply chain rationalisation, process integration, and operational excellence programmes.

These initiatives are expected to structurally improve cost competitiveness, strengthen margins, and enhance operational resilience while enabling IndianOil to maintain affordability, accessibility, and sustainability across its energy offerings in an increasingly competitive and evolving energy landscape.

3.4.3. Human Capital and Capability Building

As IndianOil expands its presence across petrochemicals, natural gas, renewable energy, sustainable fuels, hydrogen, digital technologies and other emerging business areas, workforce development remains an important priority. During the year, the Company continued to invest in leadership development, role-based capability building, workforce reskilling and continuous learning initiatives, with particular emphasis on technology, digital applications, AI, sustainability and emerging energy businesses. These efforts support the availability of skills and leadership capabilities required across both existing and growth businesses.

For a detailed discussion on the Companys human capital strategy, learning and development initiatives, employee engagement programmes and leadership development efforts, please refer to the Employees chapter of this Integrated Annual Report on Page 44.

3.4.4. R&D as a Strategic Differentiator

IndianOils R&D efforts are increasingly directed towards areas that have direct relevance for business competitiveness, including refining technologies, catalysts, specialty chemicals, lubricants, pipeline solutions, process optimisation and emerging energy pathways. The focus extends beyond research to commercial deployment, import substitution, technology ownership and development of proprietary solutions that improve operational performance across businesses. Commercial deployment of proprietary technologies such as the XtraFlo-P drag reducing agent, i-ZN22 polypropylene catalyst, IndiCATPrime catalyst, and digital twin-based catalyst performance systems is supporting cost optimisation, operational reliability, and reduced dependence on imported technologies across the value chain. As the Company expands its presence across petrochemicals, alternative fuels and emerging energy segments, indigenous technology development is expected to play an increasingly important role in supporting future growth opportunities.

3.5. EXECUTING THE TRANSITION: BUILDING A FUTURE-READY INDIANOIL

Project SPRINT was launched in April 2025 as a three-year Company-wide programme to improve performance through profitable growth, execution excellence and cost optimisation. The programme aligns strategic priorities across business verticals and enabling functions through a common framework of goals, performance metrics and accountability mechanisms, supporting a more coordinated approach towards execution across the Company.

The first year of implementation saw progress across all six pillars of the programme. Key developments included advancement of group refining capacity expansion towards approximately 98 MMTPA, growth across retail, lubricants and natural gas businesses, long-term gas sourcing initiatives, improvement in refinery energy efficiency, reduction in LPG bottling and aviation operating costs, continued expansion of digital and AI-enabled applications, development of leadership and workforce capabilities, and progress across renewable energy, sustainable aviation fuel, green hydrogen and petrochemical integration projects. The programme also introduced greater rigour in planning, milestone tracking,

4. Financial Performance Review

The Standalone Financial Performance of your Company and Segment wise performance are summarised below:

in Crore

Particulars	2025-26	2024-25	Variation
Revenue from Operations	8,86,224	8,45,513	40,711
Earnings before Interest, Depreciation and Taxes	73,718	39,898	33,820
Profit before Taxes	48,784	15,882	32,902
Profit after Taxes	36,802	12,962	23,840
Total Equity	2,04,544	1,78,677	25,867
Borrowings	1,10,668	1,34,466	-23,798
Revenue from Operations (Segment Wise)
A. Petroleum	8,12,268	7,73,632	38,636
B. Petrochemicals	28,050	27,982	68
C. Gas	44,262	42,211	2,051
D. Other Businesses*	1,644	1,688	-44
Segment Results ^
I. Petroleum	56,462	17,934	38,528
II. Petrochemicals	1,015	-440	1,455
III. Gas	-255	1,427	-1,682
IV. Other Businesses*	-525	-160	-365

* Other Businesses comprise of Oil & Gas Exploration Activities, Explosives & Cryogenic Business and Wind Mill & Solar Power Generation.

^ Segment Results are profits before deducting finance cost, income tax, unallocable expenses and before adding interest income, dividend income, income and exceptional income from each segment.

4.1. STANDALONE FINANCIAL PERFORMANCE

During 2025-26, the average price of benchmark Indian Basket crude was USD 71 per barrel as compared to $79 per barrel in the previous year. From April 2025 to February 2026 the average price of Indian Basket crude was $67 per barrel which spiked sharply in March 2026 to the average of $113 per barrel due to escalation of the West Asia conflict and closure of the Strait of Hormuz. The profitability for the year 2025-26 was largely insulated from the impact of these developments due to inventory procured at normal prices before the conflict.

Revenue from Operations increased from 8,45,513 Crore in the previous year to 8,86,224 Crore in 2025-26, registering a growth of 5%. Increase in the revenue can be primarily attributed to increase in total sales volume by 4.825 MMT i.e., increase from 100.292 MMT in last year to 105.117 MMT in 2025-26. Moreover, during the year, monthly instalment of LPG compensation for the period November 2025 to March 2026 amounting to 6,035.85 Crore have been recognised as Revenue from Operations of your Company.

Net Profit increased from 12,962 Crore in the previous year to 36,802 Crore in 2025-26. The improvement in profitability was mainly on account of increase in refining and marketing margins on petroleum and petrochemical products and decrease in buffer losses on retail sales of LPG as compared to previous year. As a result, your Companys EBITDA margin increased from 4.50% to 8.32%, Operating Profit margin increased from 2.11% to 5.84% and Net Profit margin increased from 1.53% to 4.15% as compared to previous year. Further, due to improvement in profitability, your Companys Return on Average Capital Employed improved from 7.10% to 17.05% and Return on Average Net Worth improved from 8.69% to 22.67% as compared to previous year.

Current Ratio of your Company also increased from 0.67 to 0.70 times as compared to previous year, indicating a consistent balance between current assets and liabilities. Decrease in borrowings led to improvement in your Companys Debt-to-Equity ratio from 0.75 to 0.54 times. Consequently,

Interest Coverage Ratio also increased from 4.02 to 7.98 times and Debt Service Coverage Ratio also increased from 1.07 to 2.39 times as compared to previous year. For 2025-26, the average inventory-holding period was about 44 days and your Companys average collection period was about 7 days.

Your Companys Earnings Per Share (EPS) increased from 9.41 to 26.72 as compared to previous year. During the year, your Company paid the final dividend of 4,131.47 Crore for 2024-25 and interim dividend of 9,640.09 Crore for 2025-26. The Board of Directors has recommended a final dividend of 1.25 per equity share for 2025-26, subject to approval by the members of your Company in the Annual General Meeting (AGM).

Detailed financial indicators and ratios for the last five years are provided in the section Performance at a Glance forming part of the Integrated Annual Report.

4.2. GROUP FINANCIAL PERFORMANCE

The Group s Revenue from Operations increased from 8,59,363 Crore in previous year to 9,01,453 Crore in 2025-26. Net Profit of the Group increased from 13,789 Crore to 43,677 Crore as compared to previous year. The contributing factors are similar to the factors which contributed to improvement in profitability on standalone basis. The information on contribution to the Groups profitability by each of the group companies is provided in Note 46 of Consolidated Financial Statements.

The detailed financial performance of the material subsidiaries, Joint Ventures and Associates is provided in Note 33A and 33B of the Consolidated Financial Statements. During the year, the subsidiaries Chennai Petroleum Corporation Ltd. reported Net Profit of 3,103 Crore and Total Comprehensive Income of 3,096 Crore; and Lanka IOC PLC reported Net Profit of 355 Crore and Total Comprehensive Income of 461 Crore. The Joint Ventures & Associates, Petronet LNG Ltd. achieved Net Profit of 3,913 Crore and Total Comprehensive Income of 3,907 Crore; Hindustan Urvarak and Rasayan Ltd. achieved Net Profit of 2,457 Crore and Total Comprehensive Income of 2,459 Crore.

4.3. CONTRIBUTION TO THE NATIONAL EXCHEQUER

in Crore

	2025-26	2024-25
A. CONTRIBUTION TO CENTRAL EXCHEQUER
Customs Duty	5,323.48	5,478.26
National Calamity Contingent Duty	336.12	316.80
Excise Duty	1,02,634.00	89,736.90
Corporate/ Income Tax	10,330.00	1,895.00
Dividend income to Central Govt.	7,272.20	5,090.54
IGST	2,878.85	3,991.88
CGST	4,291.09	3,804.00
Sub Total (A)	1,33,065.74	1,10,313.38

in Crore

	2025-26	2024-25
B. CONTRIBUTION TO STATE EXCHEQUER
Sales Tax/ VAT (including irrecoverable taxes)	1,22,580.21	1,17,867.58
SGST/UTGST	4,286.47	3,895.74
Dividend to State Govt.	16.20	11.34
Octroi/Duties Incl. Electricity Duty	181.66	0.02
Others	20.39	211.41
Sub Total (B)	1,27,084.93	1,21,986.09
Grand Total (A+B)	2,60,150.67	2,32,299.47

5. Risks and Concerns

IndianOils business is exposed to a diverse set of internal and external factors that may influence its operational and financial performance. Key areas of risk include volatility in crude oil, natural gas and foreign exchange markets; geopolitical developments affecting global energy supply chains; changes in the policy and regulatory landscape; demand shifts across conventional and emerging energy segments; execution of large capital projects; cyber and information security; operational integrity of critical assets; and the availability of skilled talent. Your Company also evaluates risks arising from the evolving energy mix, technological developments and climate-related developments that could influence future investment decisions and business priorities.

A comprehensive discussion on your Companys principal risks, governance structure and mitigation measures is provided in the Enterprise Risk Management section on page 76 of this Integrated Annual Report.

6. Internal Control Systems - Process Excellence

Your Company has put in place Internal Control Systems comprising rules, policies and procedures that not only provide direction and increase efficiency but also strengthen the adherence to policies, while ensuring smooth and efficient business processes. Your Company has laid down various policies as well as detailed manuals, which cover almost all the aspects of the business. The internal processes and policies are reviewed from time to time to align them with the changing business requirements. Organisation-level controls, operational-level controls, anti-fraud controls and general IT controls have been put in place to ensure that business operations are carried out efficiently and effectively and chances of errors/frauds are minimised. The internal control systems are commensurate with the size and operations of your Company. Your Company has an independent Internal Audit Department, headed by an Executive Director, who reports to the Chairman. The Department has officers from Finance as well as other various technical functions. The audit assignments are carried out as per the Annual Audit Programme approved by the Audit Committee. The Internal Audit carries out extensive audits throughout the year covering every business process. The Statutory Auditors are also required to issue the Independent Auditors Report on the Internal Financial Controls over Financial Reporting for your Company under Clause (i) of Sub-Section 3 of Section 143 of the Companies Act, 2013. The report issued thereupon is attached to the Standalone and Consolidated Financial Statements respectively. The Audit Committee carries out a detailed review of the Financial Statements and deliberations with the Internal Auditors and Statutory Auditors before the same is recommended to the Board for approval.

6.1. REINFORCING THE CONTROL ENVIRONMENT

Your Company maintains a robust and comprehensive internal control framework that adheres to best-in-class financial control standards and regulatory requirements. As a Maharatna PSU, your Company is also subject to rigorous oversight by multiple auditors including the Comptroller and Auditor General (CAG) of India, besides its Statutory Auditors. The strength and effectiveness of your Companys internal control systems is evidenced by the fact that it has received NIL comments from CAG for 20 years consecutively, which is a testament to the reliability and robustness of its financial reporting and operational controls. Your Company has implemented around 1,800 Internal Financial Controls (IFCs) across its operations, ensuring comprehensive coverage of all critical business processes and mitigating risks at various operational levels.

To further enhance the credibility and effectiveness of its internal control systems, your Company reviews its processes and controls across operational, financial and IT domains. The Company has progressively integrated advanced technologies including Artificial Intelligence and Machine Learning-based analytics for preventive maintenance checks and monitoring of critical parameters, thereby enhancing operational reliability and reducing downtime. Its internal audit function operates with complete independence and reports directly to the Chairman, ensuring objective assessment of control effectiveness. Your Company has also implemented automated monitoring tools and digital dashboards for real-time tracking of key controls, automated exception reporting mechanisms, and regular third-party assessments of its IT systems and cybersecurity frameworks to ensure continuous improvement and adherence to evolving best practices in internal controls and financial reporting.

7. Human Resources & Industrial Relations

The Company remains committed to employee engagement, talent development, and continuous learning to build a motivated, adaptable, and future-ready workforce. Through focused upskilling, leadership development, and succession planning initiatives, it nurtures talent across all levels and strengthens its leadership pipeline. Details of Human Resource initiatives / developments are provided in the Directors Report.

The industrial relations climate in your Company remained stable and constructive during the year, supported by a long-standing culture of dialogue, mutual respect and collaboration between the management and employee collectives. Your Company maintains regular engagement with employee representatives to discuss developments in the business environment, operating priorities, organisational changes and future plans, while also taking into consideration their views and suggestions on matters affecting the workforce and operations.

Structured interactions between the management and employee collectives continued to serve as an important forum for deliberations on productivity, workplace welfare, safety and the evolving requirements of the business. The continued support and cooperation extended by employee collectives have contributed to maintaining operational continuity and addressing business challenges in a coordinated manner.

As of March 31, 2026 the employees strength of the Company was 29,650 comprising of 18,929 executives and 10,721 non-executives. It includes 2,640 women employees.

8. Cautionary Statement

This MD&A contains certain statements that may be considered forward-looking statements, including, but not limited to, statements relating to your Companys objectives, expectations, projections, estimates and assumptions. These statements are based on managements current views and assumptions and are subject to inherent risks and uncertainties. Forward-looking statements are typically identified by words such as anticipate, believe, estimate, expect, intend, plan, project, seek, target and similar expressions, or by their context. These statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond your Companys control.

Important factors that could cause actual results to differ materially from those expressed or implied in such statements include, but are not limited to, changes in economic conditions, regulatory and tax developments, industry dynamics, input costs, and other unforeseen events. Readers are cautioned not to place undue reliance on these forward-looking statements. Your Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required under applicable laws.