State-run refiner Indian Oil Corporation on Thursday reported a more than four-fold jump in its standalone net profit for the December quarter, driven by a sharp improvement in refining and marketing margins and higher fuel sales, even as its petrochemicals business continued to remain under pressure.
IOC posted a standalone net profit of ₹12,125.86 crore in Q3 FY26, compared with ₹2,873.53 crore in the same period a year ago, according to a stock exchange filing. The strong earnings performance came as softer crude oil prices boosted refining profitability — a key driver for fuel producers — while domestic fuel consumption remained firm.
Refining Edge
Revenue from operations during the quarter rose to ₹2.31 lakh crore, up from ₹2.16 lakh crore in the corresponding period of the previous fiscal year.
Fuel sales volumes climbed 5% year-on-year to 26.015 million tonnes, compared with 24.78 million tonnes in Q3 FY25, reflecting steady demand across transport and industrial segments.
While IOC did not disclose quarterly gross refining margin (GRM) figures, it said it earned $8.41 per barrel for every barrel of crude processed into fuels during the April–December 2025 period, sharply higher than $3.69 per barrel in the same period last year, underscoring the dramatic improvement in refining economics.
Pre-tax earnings from the fuel business surged nearly four-fold to ₹16,836.08 crore, while income from the gas segment rose 34% to ₹596.45 crore.
Policy Tailwinds
The company also recognised ₹2,414.34 crore as subsidy income linked to government compensation for losses incurred on selling domestic cooking gas (LPG) below market prices. The Centre had approved a one-time compensation of ₹14,486 crore for IOC, to be paid in 12 monthly instalments starting November 2025. The company said it had accounted for the November and December instalments as revenue, though it did not confirm receipt.
However, the petrochemicals business continued to weigh on performance, with losses in the segment more than doubling to ₹361.51 crore, reflecting margin pressure and subdued pricing.
For the first nine months of FY26, IOC’s standalone net profit surged to ₹25,424.91 crore, compared with ₹5,696.72 crore in the year-ago period. Revenue from operations during April–December rose to ₹6.53 lakh crore from ₹6.27 lakh crore, while domestic fuel sales increased 4.3%. Petrochemical sales volumes rose 3% to 2.411 million tonnes over the nine-month period.
“Improvement in net profit is mainly on account of higher refining and marketing margin,” the company said.