Indian Oil Corporation Q1 results: Net profit seen at ₹10,347 crore upon revenue of ₹1.95 lakh crore

IOC Q1 results: Indian Oil Corporation Ltd, (IOC), the state-run oil marketing company, is expected to report operationally strong results in the first quarter of FY24 led by sharp recovery in marketing margins.

The company is likely to see sequential improvement in Petchem performance, but a decline in Singapore gross refining margin (GRM).

Analysts believe the Indian oil marketing companies (OMCs) to deliver decent earnings in the quarter ended June 2023 driven by recovery in marketing margins supported by moderated gross refining margins (GRM).

Decline in both crude costs and softer product prices are likely to benefit OMCs’ marketing earnings in Q1. For OMCs, retail auto fuel margins are expected to improve further to ₹10 per liter for petrol and 12.6 per liter for diesel in Q1FY24, primarily led by a decline in Brent prices and the retail fuel prices remaining unchanged during this period.

Brent crude prices averaged $78.4/bbl during the quarter, declining 3% QoQ as demand concerns have thus far overshadowed the impact of production cuts.

Read all Q1 Results here

Meanwhile, Singapore GRM of OMCs declined to $4.0 per barrel from $8.2 per barrel in Q4FY23, with middle distillate cracks declining during the quarter. 

For Indian Oil Corporation, analysts expect net profit in the April-June quarter to rise to ₹10,347 crore from ₹10,058 crore in the previous quarter. The company had posted a net loss of ₹1,992.5 crore in Q1FY23.

IOC’s revenue in Q1FY24 is expected to fall to ₹1,95,814 crore, as compared to ₹2,02,994 crore, QoQ, and versus ₹2,24,252 crore, YoY.

Also Read: BPCL Q1 Results: Net profit at ₹10,550.88 crore versus loss year ago

Brokerage firm Motilal Oswal Financial Services expects IOC’s refinery throughput of 18.5 mmt, down 2% YoY and 3% QoQ. Reported GRM are likely to be at $11.1 per barrel, with gross marketing margin at ₹10 per liter.

“Petchem performance to improve QoQ as PE/PP cracks have improved on a sequential basis. Decline in Singapore GRM is likely to adversely impact IOC the most among peers due to its highest leverage to refining,” the brokerage house said.

On the operational front, IOC’s EBITDA is expected to rise to ₹17,846 crore, while EBITDA margin may improve to 9.1%.

At 9:50 am, IOC share price was trading 0.26% higher at ₹95.85 apiece on the BSE ahead of Q1 results.

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