IOCL declines 4% after slipping into loss in Q2 from profit a year ago

Indian Oil Corporation Ltd (IOCL) shares slipped 4.3 per cent on Tuesday and registered an intraday low of Rs 140.7 per share on BSE. The selling pressure came after the company slipped into loss in Q2FY25 from profit a year ago.

 

Around 11:12 AM, IOCL shares were down 4.04 per cent at Rs 141.15 per share. In comparison, the BSE Sensex was down by 0.36 per cent at 79,717.02. The market capitalisation of the company stood at Rs 2,00,450.98 crore. 

 

Before the last few minutes of market close on Monday, IOCL reported a net loss of Rs 169.58 crore as compared to a net profit of Rs 13,114.3 crore in Q2FY24. On a sequential basis, the oil marketing company's net profit fell from Rs 3,528.5 crore recorded in the preceding quarter.

 

 

The decline in net profit can be attributed to a crash in average gross refining margins (GRMs)—the revenue refiners accrue from transforming each barrel of crude oil into refined fuel products. IOCL reported that the average GRM stood at $4.08 per barrel in the first two quarters of FY25, 68.9 per cent lower than the $13.12 per barrel recovered in the same period of FY24.

 

"The core GRM or the current price GRM for FY24 after offsetting inventory loss or gain comes to $2.97 per barrel," IOCL said. 

 

IOCL’s revenue from operations slipped 3.24 per cent to Rs 1,98,615.8 crore, compared to Rs 2,05,283.03 crore in Q2 FY24. 

 

The drop in revenue is due to lower earnings from the largest segment of petroleum products, which dipped 3.9 per cent to Rs 1,830 crore, down from Rs 1,900 crore in the same quarter of the previous year. 

 

Meanwhile, its expenses also rose 7.49 per cent to reach Rs 2,01,760 crore in Q2, up from Rs 1,87,699.29 crore in the year-ago period. The cost of materials consumed was up 7.6 per cent, and purchases of stock in trade, higher by 6.1 per cent, were the two biggest expenses.

 

However, sales from the much smaller petrochemicals business rose 3 per cent to Rs 6,813.3 crore, up from Rs 6,613.3 crore in Q1 FY24.  

 

The quarter under review also saw a 12 per cent growth in revenue from other business activities to Rs 10,236 crore, up from Rs 9,137.9 crore in the same quarter of the previous year.

 

In the past one year, IOCL shares have gained 66.66 per cent against Sensex's rise of 24.7 per cent.