Refining Woes Hit Indian Oil Hard, Profit Crashes 75%

31 Jul 2024 , 10:34 AM

Indian Oil Corporation (IOC) reported a standalone net profit of ₹3,723 Crore for the first quarter of fiscal year 2024-25, according to a regulatory filing on July 30. This marks a significant 75% decline compared to the standalone net profit of ₹14,735.3 Crore recorded in the same quarter last year.

Revenue from operations for the June 2024 quarter decreased by approximately 2%, falling to ₹2.15 Lakh Crore from ₹2.21 Lakh Crore in the previous fiscal year. The company’s earnings before interest, taxes, depreciation, and amortisation (EBITDA) also fell by 55% year-on-year, amounting to ₹11,024.51 Crore.

The decline in earnings is attributed to shrinking refining margins, with the average gross refining margin (GRM) dropping to $6.39 per barrel in Q1 FY25, down from $8.34 per barrel in the same period the previous year.

In a separate announcement, IOC’s board has granted stage-1 approval for the construction of a Greenfield Terminal at Bihta, Patna, Bihar, on the Barauni-Kanpur product Pipeline (BKPL) and the Patna-Motihari-Baitalpur Pipeline (PMBPL). The project is estimated to cost ₹1,698.67 Crore.

Following the release of the Q1 results, IOC’s shares briefly declined during the final hour of trading but later recovered. The stock closed at ₹182.95 on the NSE, up 1.42%.