Top Indian Companies: Indian Oil Corporation Limited

Indian Oil Corporation Limited (IOCL) PSU company under the Ministry of Petroleum and Natural Gas headquartered in New Delhi.

It is the largest government owned oil corporation in the country, with a net profit of $6.1 billion for the financial year 2020-21.

Indian Oil's business interests overlap the entire hydrocarbon value-chain, including refining, pipeline transportation, marketing of petroleum products, exploration and production of crude oil, natural gas and petrochemicals.

Indian Oil has ventured into alternative energy and globalisation of downstream operations. It has subsidiaries in Sri Lanka (Lanka IOC), Mauritius (IndianOil (Mauritius) Ltd) and the Middle East (IOC Middle East FZE).

In January 2021, sales were registered at an all time high of 410,000 barrels of oil per day till 26 January 2021. Delek, Qatar Petroleum, Saudi Aramco are its largest business partners with Abu Dhabi National Oil Company and National Iranian Oil Company signing deals to deliver high production output at end of 2020.

Business divisions

There are seven major business divisions in the organization:

• Refineries Division

• Pipelines Division

• Marketing Division

• R&D Division

• Petrochemicals Division

• Exploration & Production (E&P) Division

• Explosives and Cryogenics Division

Products and services

Indian Oil accounts for nearly half of India's petroleum products market share, 35% national refining capacity (together with its subsidiary Chennai Petroleum Corporation Ltd., or CPCL), and 71% downstream sector pipelines through capacity.

The Indian Oil Group owns and operates 11 of India's 23 refineries with a combined refining capacity of 80.7 million tonnes per year. Indian Oil's cross-country pipeline network, for the transport of crude oil to refineries and finished products to high-demand centres, spans over 13,000 km.

The company has a throughput capacity of 80.49 million tonnes per year for crude oil and petroleum products and 9.5 million cubic metres per day at standard conditions for gas.

Refinery locations

* Barauni Refinery

• Bongaigaon Refinery

• CPCL, Chennai

• CPCL, Narimanam

• Digboi Refinery

• Guwahati Refinery

• Haldia Refinery

• Koyali Refinery

• Mathura Refinery

• Panipat Refinery

• Paradip Refinery

Foreign subsidiaries

• IndianOil (Mauritius) Limited

• IOC Middle East FZE, UAE

• Lanka IOC PLC, Sri Lanka

• IOC Sweden AB, Sweden

• IOCL (USA) Inc., USA

• IndOil Global B.V. Netherlands

• IOCL Singapore Pte. Ltd.

Shareholding Pattern

• The Shareholding Pattern page of Indian Oil Corporation Ltd. presents the Promoter's holding, FII's holding, DII's Holding, and Share holding by general public etc.

Holder's Name No of Shares % Share Holding

No of Shares 9414158922 100%

Promoters 4848133178 51.5%

Foreign Institutions 747126481 7.94%

Banks/Mutual Funds 317758624 3.38%

Central Govt 10800000 0.11%

Others 2119776601 22.52%

GeneralPublic 510412705 5.42%

Financial Institutions 860151333 9.14%

FY2023 Q4 and Full ear Results

IOC, on Tuesday reported a 67 per cent jump in its March quarter net profit on the back of a recovery in fuel marketing margins and better refining margins.

Standalone net profit was at Rs 10,058.69 crore, or Rs 7.30 a share, in January-March compared with Rs 6,021.88 crore, or Rs 4.37 per share, in the same period a year back, according to a company's stock exchange filing.

The jump in fourth-quarter net profit helped the company post Rs 8,241.82 crore of net profit for the full fiscal year 2022-23 (April 2022 to March 2023) by negating the losses the firm had to suffer in the first half of the financial year from holding petrol, diesel and LPG prices despite a surge in cost.

IOC and other state-owned fuel retailers Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) continue to hold prices but a fall in international oil prices has meant that they are now making healthy margins.

Petrol and diesel prices have been on a freeze since April 6 last year. The basket of crude oil that India imports was over USD 100 per barrel in April last year and is now less than USD 75.

Crude oil is processed in refineries such as ones owned by IOC, into fuel.

While the prices have fallen, the three state-owned firms continue to hold rates to recoup losses suffered in the first half of the fiscal year.

IOC reported a net profit of Rs 8,242 crore for FY 2022-23 compared with Rs 24,184 crore last year. The lower profit was "mainly on account of lower marketing and petrochemicals margin and higher exchange losses during the current year as compared to last year," the company said in a statement.

HPCL last week posted a loss of Rs 6,980.23 crore in 2022-23. This is because it sells more fuel than it makes. The excess fuel is bought from private and other refiners who price it at the market rate, leading to losses.

IOC board recommended a final dividend of Rs 3 per share.

Its topline was up 10 per cent at Rs 2.26 lakh crore in the fourth quarter. Marketing sales for the quarter stood at 22.95 million tonnes, flat quarter-on-quarter but 5 per cent higher than 21.789 million tonnes sold a year back.

For the full year, it sold 90.65 million tonnes of fuel, as against 80.49 million tonnes in 2021-22. Its refineries processed higher crude oil to meet the rising demand of the economy.

IOC earned USD 19.52 on turning every barrel of crude oil into fuel in FY23 as against USD 11.25 per barrel gross refining margin a year back. The core GRM after offsetting inventory loss/gain was USD 20.14 per barrel.

"The suppressed marketing margins of certain petroleum products have offset the benefit of the increase in GRM," IOC said.

The GRM for Q4 was USD 15.3 per barrel.

EBITDA came in at Rs 15,340 crore, up 3.3x QoQ (on a weak base).

IOC's operating profit improved QoQ due to strong refining margins and improvement in marketing segment performance.

IOC Chairman S M Vaidya, said, "IndianOil sold 95.714 million tonnes of products, including exports, during FY 2022-23. Our refining throughput for FY 2022-23 was 72.408 million tonnes and the throughput of the corporation's countrywide pipelines network was 97.382 million tonnes during the year

Brokerage Outlook

Reiterate BUY: Brokerage, Prabhudas Lilladher maintain BUY on IOCL with a PT of Rs205 as we value based on 8x PER core EPS FY23E and add the value of investments at Rs9/sh.

Brokerage, Prabhudas Lilladher maintain their IOCL’s earnings estimate for FY22-24E. IOCL reported lower than expected Q3 results with standalone EBITDA of Rs93.9bn (-12%QoQ; PLe Rs 120.0bn) and PAT of Rs58.6bn (-8%QoQ; PLe Rs72.4bn), due to inventory loss of Rs25.3bn on unsold petrol and diesel inventory.

Prabhudas Lilladher believe OMCs are well placed to benefit from global pickup in economic activity post pandemic as their refining and marketing earnings are expected to improve. Brokerage maintain ‘BUY’ at a PT of Rs205.

ESG

As a responsible corporate, IndianOil utilizes the resources responsibly. It is their endeavor to reduce the impact on natural resources. IOCL is promoting indigenization of raw materials imported at their Petrochemicals plants. Continuous efforts to reduce the material consumption by ensuring resource efficiency and increase the utilization of recycled materials

Indian Oil strives to reduce the amount of waste generated during its operations and reuse/recycle the waste wherever possible. Oily sludge, slop, spent catalyst and ETP sludge are the major wastes generated at the installations. Indian Oil ensures safe disposal of the wastes as per CPCB and SPCB norms.