Indian Oil slips 3% as June quarter profit declines 47% YoY to Rs 1,911 cr

Shares of Indian Oil Corporation slipped 3 per cent to Rs 85.8 on the BSE on Monday after the oil marketing company's June quarter standalone profit declined 47 per cent Rs 1,910.84 crore. The profit was Rs 3,596.11 crore in the year-ago quarter.

With a good part of the quarter being spent under lockdown where the vehicular movement was sparse, IOC fuel sales fell 29 per cent to 15.25 million tonnes. Income from operations fell to Rs 88,936.54 crore in April-June from Rs 150,136.70 crore a year back.

"The company's sales during the month of April 2020 were impacted significantly by the nationwide lockdown and consequently capacity utilization of the plants was lower. However, the same has come back close to normal levels by the month of June 2020," it said.

Its refineries processed 25 per cent less crude oil at 12.9 million tonnes in the first quarter of 2020-21 fiscal. IOC said it lost USD 1.98 on turning every barrel of crude oil into fuel in the April-June period. This compared to a gross refining margin of USD 4.69 a barrel in Q1 of 2019-20.  

"Despite the sharp crude price increase (from its multi-decade trough) during 1QFY21, IOCL reported total inventory loss of INR32b owing to its longer inventory cycle. However, margins led to a huge beat on our EBIDTA estimates. Also, debt has decreased QoQ from Rs 116,500 crore to Rs 98,600 crore," said analysts at Motilal Oswal Financial Services. 

It added: Global demand recovery is likely to remain capped in the near term with concerns over high inventory and further delayed recovery in Jet fuel demand. Also, China is likely to export more with an increase in its refinery throughput, deepening the supply glut and enhancing the pressure on product margins. However, with lifting of lockdowns across the world, demand is once again seeing an uptick.

At 10:41 am, the stock was trading 2.2 per cent lower at Rs 86.5 apiece, as against 400 points decline in S&P BSE Sensex at 37,206.