Between April and June, Indian Oil's gross sales touched Rs 17,134.89 crore, compared with Rs 14,104.64 crore it had posted in the first quarter of last year. According to a company release, the national oil company was on the verge of embarking on new projects, worth Rs 5,000 crore, such as diesel hydro-desulphurisation units at its Haldia, Gujarat and Mathura refineries and the expansion of its Panipat refinery. The centre has also approved Indian Oil's proposal to set up a 9-million-tonne grassroots refinery at Paradip in Orissa.

Insight

Better cash flows boost bottomline

The effect of partialdecontrol is clearly visible in IOC's results. Though turnover has increased by only 21 per cent, bottomline has shown a tremendous growth rate of 105 per cent. The main reason for the improvement in the bottomline seems to be better cash flows as a result of removing five products from the administered pricing mechanism, which has negated the increase in crude oil price payable to the Oil & Natural Gas Corporation (ONGC). Furthermore, increase in prices of petrol and liquefied petroleum gas (LPG) and linking diesel (which is one of the major products) with international prices has helped the company in improving its operating margin and subsequently its bottomline.