IOC Q3 Results: Net profit plummets 64% to ₹2,874 crore, revenue hits ₹1.94 lakh crore; OMC stock down over 4%
- IOC Q3 Results: IOC had a ₹7,800 crore inventory loss delta in the third quarter, and another ₹1,900 crore was due to forex losses.
IOC Q3 Results: Indian Oil Corporation Ltd (IOC) announced its October-December quarter results for fiscal 2024-25 (Q3FY25) on Monday, January 27, reporting a sharp drop of 64 per cent in its standalone net profit to ₹2,873.53 crore, compared to ₹8,063.39 crore in the corresponding period last year.
IOC was mostly hurt by lower marketing margins and losses in its liquefied petroleum gas (LPG) segment. IOC Director (Finance) said the decline in profit was mainly due to inventory and foreign exchange losses and a fall in product cracks. However, India's top refiner's net profit surged quarter-on-quarter, compared to ₹189.01 crore earnings in July-September 2024.
Also Read: OMCs poised for strong H2FY25 earnings; IOC, HPCL, BPCL shares remain attractive: Analyst
IOC Q3 Results: Key Metrics
IOC had a ₹7,800 crore inventory loss delta in the third quarter, and another ₹1,900 crore was due to forex losses. Inventory loss is booked when a company buys oil at a particular price, but by the time it is able to ship to India and process it, the prices have fallen. Since the product prices are benchmarked to prevailing rates, inventory loss is accounted for.
Inventory gains happen if the reverse happens. Cracks—the difference between raw material cost (crude oil) and finished product price—dropped. Diesel dropped from $19.18 per barrel in October-December 2023 to $10.8, and petrol dropped from $7.04 a barrel to $3.63 per barrel in the December quarter.
IOC also saw its refining margins fall in Q3. It earned $2.95 on turning every barrel of crude oil compared to a gross refining margin of $13.53 per barrel in Q3 of the previous fiscal. IOC's average gross refining margin - the profit from making refined products from one barrel of oil - for the April-December period fell to $3.69 per barrel from $13.26 per barrel last year.
Indian Oil and its unit, Chennai Petroleum, control about a third of India's five million barrels per day refining capacity. However, IOC, along with its peers HPCL and BPCL, have been facing losses in the LPG segment as domestic prices remained unchanged even as raw material costs spiked.
IOC chairman A S Sahney said the company posted its highest-ever quarterly sale of 26.134 million tonnes, up 6.2 per cent over last year, as it refocused on its core competence of fuel sales. Petrochemical volumes also rose seven per cent, while its gas trading volumes jumped 24 per cent in the quarter.
He said the company also gained market share - from 46.4 per cent in PSU sale in Q2 (July-September) to 46.7 per cent in Q3. In the industry as a whole (after taking into account private fuel retailers), IOC market share rose to 41.3 per cent in Q3 from 41.1 per cent in the preceding quarter, he said.
On Monday, shares of IOC dropped over four per cent to hit an intraday low of ₹122.60 before settling 3.16 per cent lower at ₹124.20 apiece on the BSE. The state-run OMC commands a market cap of ₹1,75,385.78 crore.
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