Indian Oil Q1 Results: Costlier Fuel Brings Profit, Revenue Nearly Halves
Indian Oil Corp. returned to profit in the quarter ended June as it hiked retail fuel prices.
The oil marketer posted a profit of Rs 1,910.8 crore compared with a loss of Rs 5,185 crore in the quarter ended March, according to an exchange filing. That compares with the Rs 2,168-crore consensus estimate of analysts tracked by Bloomberg.
Indian Oil had recorded an exceptional loss of Rs 11,034 crore in the base quarter due to write-down of inventories amid fall in oil prices.
- Revenue fell 47.3% sequentially to Rs 62,396.6 crore in the April-June period, compared with an estimated Rs 68,500 crore.
- Operating profit, however, rose to Rs 5,512.1 crore from Rs 212 crore in the previous quarter.
- Operating margin expanded to 8.83% from 0.2% in the preceding three months. That compares with an estimate of 9.3%.
- Negative gross refining margin at $1.98 per barrel vs negative GRM at $9.64.
- Core GRM after offsetting inventory loss or gain comes to $4.27 per barrel.
Global crude oil prices tumbled as a result of an all-out price war between Russia and Saudi Arabia-led OPEC and falling demand amid the novel coronavirus outbreak. Prices of Brent crude, the Asian benchmark for oil, averaged around $33.39 a barrel during the reported quarter after recovering from a record plunge in April. That compares with $50.2 a barrel in the January-March period.
Oil marketing companies had been adjusting their prices daily till the beginning of lockdown period in March. But through April and May, prices remained unchanged even as global crude oil prices tumbled. That's because the central government used the fall in global oil prices to hike taxes and shore up its revenue. But as crude recovered, retail prices of petrol and diesel rose. Starting June 7, retail price went up for 22 consecutive days. In Delhi, the price of petrol and diesel rose 13% and 16% during the period to Rs 9.13 and Rs 11.1 a litre, respectively.
Shares of Indian Oil fluctuated between gains and losses to trade flat at Rs 88.35 after the quarterly results were announced.