IOC Q3 profit soars to Rs 8,063 crore, 9-month numbers top best-ever annual earning

New Delhi: Indian Oil Corporation (IOC) on Wednesday reported a massive jump in its third quarter net profit as compared to the year-ago period when it was financially struggling as input raw material crude oil prices spiked but retail finished product prices remained on freeze.

Standalone net profit of Rs 8,063.39 crore in October-December 2023-24 was higher than Rs 448.01 crore profit in the same period a year ago but lower than Rs 12,967.32 crore earnings in the preceding three months ended September 30, 2023, according to a stock exchange filing by the company.

The profit was aided by a boost in marketing margins as a freeze on petrol and diesel price revision despite a fall in input crude oil prices helped recover losses incurred when rates were high in 2022-23.

Pre-tax earnings from sale of petroleum products soared to Rs 11,428.88 crore in the third quarter of the current fiscal compared to Rs 1,541.95 crore in the same period last year.

IOC uses mostly imported crude oil to make fuels such as petrol, diesel and LPG at its refineries. These are then sold through its vast network of petrol pumps and LPG distributor agencies.

In 2022, state-owned fuel retailers IOC, Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) froze prices despite a spike in global oil prices following Russia's invasion of Ukraine. This was with a view to insulating consumers from price volatility.

The price freeze led to the three firms incurring losses in the first half of 2022-23 fiscal (April 2022 to March 2023). IOC incurred a loss of Rs 2,264.88 crore in April-September 2022. This year, it, however, posted record earnings of Rs 26,717.76 crore in April-September, more than the Rs 24,184 crore record net profit the company posted in 2021-22.

For nine months (April to December 2023), IOC posted a net profit of Rs 34,781.15 crore as against a loss of Rs 1,816.87 crore last year. The nine-month earning is more than the highest ever net profit the company posted in 2021-22.

IOC's revenue from operations was marginally lower at Rs 2.23 lakh crore in October-December from Rs 2.28 lakh crore a year back on lower oil prices.

Later in a statement, IOC said the profit in the nine months was higher "mainly on account of higher marketing margin and lower exchange losses."

IOC said it earned $13.26 on turning every barrel of crude oil into fuel in April-December 2023 against a gross refining margin of $21.08 in the corresponding period last year. It did not give quarterly refining margins.

Swarnendu Bhushan, co-head of research at Prabhudas Lilladher Pvt Ltd said the third quarter GRM as per their calculation came to $13.5 per barrel.

The gross marketing margin, according to their calculation, came to Rs 3.8 per litre.

The company sold 23.32 million tonne of petroleum products in the December quarter, up from 23.17 million tonne last year and 21.94 tonne sales in the preceding quarter.

Its refineries processed 18.5 million tonne of crude oil into fuel during October-December, up from 18.2 million tonne last year.

Company chairman S M Vaidya said IOC sold 72.27 million tonne of petroleum products, including exports, during the period April-December.

"Our refining throughput for the first nine months of FY 2023-24 was 55.02 million tonne and the throughput of the corporation's countrywide pipelines network was 77.03 million tonne during the period."