Indian Oil Q1 Results: Profit Falls 32% On Lower Demand, Other Income

Indian Oil Corp.‘s first-quarter profit fell as fuel demand eased during local lockdowns and other income declined.

Net profit fell 32.3% sequentially to Rs 5,941.4 crore in the quarter ended June, according to its exchange filing. That compares with the Rs 3,547.4-crore consensus estimate of analysts tracked by Bloomberg.

Revenue fell 4.1% quarter-on-quarter to Rs 1.19 lakh crore. Analysts had pegged the metric at Rs 1.28 lakh crore.

The company’s product sales fell 11.6% over the preceding three months to 18.74 metric million tonnes.

Key Highlights (QoQ)

  • Operating profit declined 17.6% to Rs 11,126.1 crore.

  • Other income fell 48.8% to Rs 563.6 crore.

  • Operating margin contracted to 9.4% from 10.9%.

  • Gross refining margin—what a company earns by converting one barrel of crude into fuel—stood at $6.58 a barrel.

India’s consumption of petroleum products fell 10.4% over the preceding quarter, with aviation turbine fuel witnessing the biggest drop of more than 30%, data released by the Petroleum Planning & Analysis Cell showed. Petrol and diesel demand contracted 13.2% and 10.5%, respectively, in the first quarter.

Refining margin, however, was supported by a higher benchmark Singapore GRM, which rose 16.7% sequentially to $2.1 a barrel in the first quarter. Brent crude prices averaged at $69.1 a barrel in the reported period—up 13% over the preceding three months. Petrol, diesel, and jet fuel spreads jumped 44%, 13%, and 36%, respectively, over the previous quarter.

However, key petrochemical cracks softened in the quarter ended June. Polyethylene, polypropylene and polyvinyl chloride naphtha spreads rose 14-75% year-on-year in the reported period compared with 52-108% jump in the quarter ended March.

Average marketing margins remained under pressure as retail fuel prices failed to keep pace with crude oil prices. Prices of petrol and diesel were increased by 9% and 10.2%, respectively, between April 1 and June 30, at a time when Brent crude turned 15.8% costlier.

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