Indian Oil Corporation on Tuesday reported a fall of 74.7% in its consolidated net profit for the first quarter of the financial year 2024-25 at Rs 3,722.63 crore from Rs 14,735.30 crore in the corresponding period a year ago.
On a sequential basis too, the net profit declined by 32% from Rs 5,487.92 crore in Q4FY24. The significant decline in the net profit comes amid a decline in the company’s gross refining margins.
The company’s revenue from operations also fell marginally by 2.4% to Rs 2.19 lakh crore in Q1FY25 compared to the same period the previous fiscal. Total income too fell by 2.4% to Rs 2.20 lakh crore from Rs 2.26 lakh crore in the first quarter of FY24.
The average Gross Refining Margin (GRM) for Q1FY25 stood at $6.39 per barrel against $8.34 per barrel in Q1FY24. “The current price GRM for the year 2023-24 after offsetting inventory loss or gain comes to $2.84 per barrel,” the company said.
IOCL’s refinery throughput for the first quarter of FY25 stood at 18.168 million tonnes as compared with 18.752 million tonnes in Q1FY24. On a sequential basis too, the throughput declined marginally by 1%.
The operating margin of the company also fell to 2.65% in the quarter ended June from 8.97% in the same period last fiscal year.
Product sales however improved in the quarter under review. Domestic sales were up by 3.2% on year at 24.063 million tonnes while exports rose by 8% to 1.189 million tonnes.
The Board of Indian Oil has accorded stage – 1 approval for construction of Greenfield Terminal at Bihta, Patna, Bihar on Barauni-Kanpur product Pipeline (BKPL) and Patna-Motihari-Baitalpur Pipeline (PMBPL) at an estimated cost of Rs. 1,698.67 crores as combined re-sitement of existing Marketing Terminal and Pipeline pump station in Patna and for undertaking pre project activities related thereto, the company informed in an exchange filing.
The state-owned oil marketing companies including IOCL have cut auto fuel prices by Rs 2 per litre in the beginning of the year, first time after April 2022. After the reduction, the gross marketing margin hit to OMCs was estimated to be around Rs 1.6-1.7 per litre with petrol at Rs 5.0 per litre and diesel at Rs 1.4 per litre, according to analysts at Emkay Global.
Elevated crude prices have raised fresh concerns about OMC’s profitability, and ability to keep the aggressive capital expenditure plans going forward.