Q2 Results: Indian Oil’s Profit Tumbles On Inventory, Forex Losses
Net profit fell 84.3 percent quarter-on-quarter to Rs 563 crore.
Indian Oil Corporation Ltd.'s net profit missed analyst estimates in the July-September quarter on inventory and foreign exchange losses.
Net profit fell 84.3 percent quarter-on-quarter to Rs 563 crore, according to the oil marketing company's exchange filing. That compares with Rs 3,714 crore estimated by analysts tracked by Bloomberg.
Profit declined because of an inventory loss worth Rs 1,807 crore compared with a gain of Rs 2,895 crore a year earlier. Brent crude averaged lower in the second quarter at $62.12 a barrel as production rose and global demand fell. This led to inventory losses as oil marketers that bought stock at higher prices sold through retail outlets at lower rates.
The company also incurred a foreign exchange loss of Rs 1,135.4 crore, according to BloombergQuint’s calculations, further impacting its bottom line.
Revenue fell 15.07 percent to Rs 1.11 lakh crore—analysts had forecast Rs 1.21 lakh crore. That came as India’s fuel consumption declined in the second quarter amid a slowing economy.
Indian Oil’s operating profit fell 57.22 percent sequentially to Rs 3,572 crore. Operating Margin narrowed to 3.20 percent versus 6.35 percent in the previous quarter.
Shares of the company fell 0.20 percent ahead of the results compared with a 0.19 percent rise in the Sensex.
Watch | BloombergQuint speaks to IOC Chairman Sanjiv Singh post Q2 earnings.