Rising Re fuels IOC net 11%

Indian Oil Corporation, the country's largest company by sales, posted an 11 per cent jump in net profit in the first quarter, helped by an appreciating rupee and strong refinery margins.

Net profit was up at Rs 1,468.41 crore (Rs 1,321.82 crore). Last year's profit also included Rs 3,225 crore the company gained after it sold its shareholding in Oil and Natural Gas Corporation.

The company's shares on the Bombay Stock Exchange, however, fell by 1.74 per cent to Rs 395.15, even as the Sensex rose by 26.34 points to 15,260.91 points.

IOC Chairman and Managing Director Sarthak Behuria said the rupee appreciation added Rs 726 crore to the company's bottom line. In the year-ago quarter, the company had incurred a loss of Rs 318 crore.

The average value of the rupee during the quarter was around 41 to a dollar compared with around $45 in the last corresponding quarter.

Since IOC is an importer of crude oil for which it pays in dollars, the stronger rupee against the dollar means the company pays less in rupee terms. The stronger rupee has also pushed the other oil refiners Bharat Petroleum and Hindustan Petroleum to the black in this quarter compared to the last corresponding quarter.

The company also recorded its highest ever refinery margins (revenue earned from processing of every barrel of crude) at $10.70 a barrel, up from $6.70 per barrel a year ago, Behuria said.

Under-realisation, due to selling petrol, diesel, kerosene and LPG, during the quarter was also lower at Rs 4,879.49 crore (Rs 5,504 crore).

"We are losing about Rs 90 crore per day on sale of petrol, diesel, LPG and kerosene. But for the rupee appreciation, the revenue loss would have been almost double," he said.

IOC was losing Rs 5.88 a litre on petrol, Rs 4.80 on diesel, Rs 14.63 per litre on kerosene and Rs 189.14 per LPG cylinder, he said. SV Narasimhan, finance director, added if the rupee had not appreciated the losses on petrol and diesel would have been around Rs 9-10 per litre. Sales turnover increased 9.5 per cent to Rs 58,205 crore (Rs 53,142 crore). IOC's total income increased 11.74 per cent to Rs 54,553.01 crore (Rs 48,819.68 crore).