Indian Oil Corporation (IOC) Reports Q3 Surprises and Challenges

Indian Oil

January 24, 2023

New Delhi, India

Indian Oil Corporation Ltd. (IOC) Q3 results

IOC’s revenue for the October-December period soared to ₹1.99 lakh crore, outpacing expectations and marking a 10.6% increase from the previous quarter. This performance exceeded the CNBC-TV18 poll estimate of ₹1.86 lakh crore, indicating robust financial health.

Profit Surpasses Expectations:

The net profit for Q3 stood at ₹8,064 crore, surpassing poll expectations of ₹4,387 crore. However, there is a notable 38% sequential decline from ₹12,967 crore in the previous quarter, signaling a need for careful examination.

Refining Segment Shines:

The Gross Refining Margin (GRM) reached $13.5 per barrel, surpassing the CNBC-TV18 poll estimate of $10 per barrel. This positive outcome underscores the profitability of IOC’s refining operations. Refining throughput also exceeded estimates, standing at 18.5 million tonnes.

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Challenges in Petchem Segment:

Despite overall positive results, the Petchem segment faced challenges, remaining operationally loss-making. The net loss widened to ₹196 crore from ₹163 crore in the previous quarter, indicating an area for improvement.

EBITDA and Margin Decline:

IOC reported a 27.3% decline in Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) from ₹21,313 crore in the September quarter to ₹15,488 crore in Q3. The EBITDA margin also dipped by 400 basis points sequentially to 7.8%, showcasing operational challenges.

Market and Stock Performance:

IOC’s stock showed resilience, gaining over 4.46% to close at ₹145.20 against the previous close of ₹139 on BSE. The market cap rose to ₹2.03 lakh crore, indicating investor confidence.

In conclusion, while IOC celebrates revenue triumphs and refining success, it faces challenges with a sequential profit decline and operational losses in the Petchem segment. Investors should closely monitor these aspects for a comprehensive understanding of the company’s overall performance.

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