More Stories

Informist, Thursday, Oct. 23, 2025

By Sunil Raghu

AHMEDABAD - Improved gross refining margins from last year, falling crude oil prices globally and a fall in under-recoveries in the liquefied petroleum gas business are likely to boost Indian Oil Corp. Ltd.'s September quarter net profit. However, the weakening rupee during the quarter may weigh on marketing margins of Indian Oil Corp. Normally, falling crude prices help increase profits but when the rupee weakens, it offsets the benefit by raising the cost of buying crude in rupee terms.

The country's largest state-owned oil refining and marketing company is expected to post a standalone net profit of INR 44.7 billion for the September quarter, compared with a loss of INR 9.8 billion in September quarter a year ago, according to the average of estimates from nine brokerages. Sequentially, it would see a fall of nearly 21.5%. The highest estimate for net profit was INR 64.9 billion from Nuvama Wealth Management Ltd. and the lowest was INR 26.3 billion by Kotak Securities.

The company's consolidated revenue for the reporting quarter is expected to have grown nearly 7% on year to INR 1.86 trillion. Sequentially, this will be a decline of nearly 3%. The highest estimate for revenue was INR 2.11 trillion from Prabhudas Lilladher Pvt. Ltd. and the lowest was INR 1.59 trillion by Nuvama Wealth Management Ltd. Indian Oil Corp. will announce its September quarter earnings on Oct. 27.

In the June quarter, Indian Oil Corp.' net profit had more than doubled on year to INR 56.9 billion. However, its revenue had risen merely 1.2% on year to INR 2.2 trillion.

Indian Oil Corp. had in its earlier filings since January said that its Jan-Mar under-recovery on LPG stood at INR 170 per cylinder and INR 160-INR 165 per cylinder in Apr-Jun. On Aug. 18, the company said that this under-recovery had come down to INR 100-INR 105 per cylinder. Moreover, on Aug. 8, the government announced a compensation of INR 300 billion to be paid to oil marketing companies in 2025-26 (Apr-Mar). This, too, is expected to aid revenue and net profit of oil marketing companies in the September quarter, including Indian Oil Corp.

Brokerages expect IOC's gross refining margins to range between $6.1 and $8.0 per barrel for the September quarter, compared with $1.8 per barrel a year ago and $2.2 per barrel in the previous quarter. The expected rise in product cracks and cheaper crude feed will boost GRMs. As per the publically available information, crude oil prices in the September quarter last year averaged around $80 per barrel, while they were mostly in the $65-$75 per barrel range this September quarter. IOC's diesel cracks are also likely to rise 52% on year in Jul-Sept and those of petrol by 53% on year, as per estimates of Nuvama Wealth Management. The publically available information show IOC's diesel cracks were in the range of INR 4-INR 6 per litre and that of petrol was INR 6-INR 8 per litre in Jul-Sept 2024. Gross refining margin reflects the difference between the cost of crude oil and the value of refined petroleum products like diesel. It is a key indicator of a refinery's operational efficiency and a key profitability metric for refiners. The product crack spread is the difference between the price of a barrel of crude oil and that of a refined product. Higher crack spreads mean better profitability for refiners processing crude into refined fuels.

IOC's September quarter crude throughput is expected to be up nearly 8% on year at 18 million tonnes, Kotak Securities said. It expects IOC's losses from LPG business to fall to INR 18 billion in the September quarter, down sharply from INR 88 billion a year ago. This, Kotak says, could see company's earnings before interest, taxation, depreciation and amortisation, or EBITDA, jump 114% on year but fall 36% sequentially.

Though IOC's refineries had lower maintenance shutdowns in the September quarter and have 4% higher domestic retail sales, the refiner's retail margins may be muted as weaker rupee could cancel out benefits arising out of relatively cheaper global fuel prices. This would mean that the company's profit per litre may not rise much. Nuvama sees IOC's diesel retail margin falling 19% on year and 44% on quarter to INR 5.6 per litre, with petrol margins likely rising 3% on year and falling 16% on quarter to INR 10.7 per litre.

Indian Oil Corp. is expected to report EBITDA of INR 109.7 billion for the September quarter, as per the average of estimates from nine brokerages. The estimates for EBITDA are in the range of INR 80.8 billion to INR 137.5 billion.

At 1300 IST, shares of Indian Oil Corp. traded at INR 150.98 on the National Stock Exchange, down 2%. The stock has risen about 8% since Aug. 18, when the company had reported its results for the June quarter. 

Of the 13 research reports on the company available with Informist, eight have a 'buy' or equivalent rating on Indian Oil Corp., three have a 'sell' rating and two 'hold' recommendation. The average target price of the buy recommendations is INR 174 per share and those of sell recommendation is INR 142.

The following are the Jul.-Sept. earnings estimates for Indian Oil Corp. from nine brokerages in descending order by the estimate of net profit in INR million:

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Akul Nishant Akhoury

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2025. All rights reserved.