Analyst Concall
No crude oil shortage, have stock of over a month, says IOC
This story was originally published at 18:34 IST on 19 May 2026
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--IOC: Savings on operations in FY26 at INR 22 bln, FY27 target INR 25 bln
--CONTEXT: Comments by IOC's mgmt in post-earnings analyst call
--IOC: To spend major share of FY27 capex on refining, pipeline segments
--IOC: To spend INR 50 bln of FY27 capex on renewables
--IOC: Gross refining margins do not reflect co's financial performance
--IOC: Refining margins volatile, unstable in June quarter
--IOC: PAT, EBITDA better showcase of co's performance
--IOC: To start seeing less capex on refining from FY28
--IOC: Not to share GRM till stability achieved
--IOC: Expect 75 mtpa refinery throughput on standalone basis in FY27
--IOC: LPG under-recovery INR 670/cylinder May vs INR 171 Apr, INR 100 Q4
--IOC: No shortage of crude oil, have inventory of over a month
--IOC: No shortage of LPG, inventory down a bit
By Sunil Raghu and Ashutosh Pati
AHMEDABAD/MUMBAI – Indian Oil Corp. Ltd. has no shortage of availability of crude oil and is maintaining an inventory of over a month, the company management told analysts and investors in post earnings call on Tuesday.
"...we don't have any shortage of either crude oil and liquefied petroleum gas, but yes, crude oil number of days inventory is still being maintained for over a month. LPG inventory has come down, but still is being managed so that we have enough LPG availability pan-India basis," a senior company official said in the analyst call.
On being asked about the under-recovery on LPG, the official said that it was INR 100 per cylinder for the March quarter of 2025-26 (Apr-Mar), which went to a high of INR 171 in April and INR 670 per cylinder in May.
IOC said that as of Mar. 31, it had an outgo of INR 231.02 billion on sale of liquefied petroleum gas cylinders to customers at discounted price on government directive. Of this, it has received INR 60.36 billion, which it has recognised as revenue for operations in the books of accounts. The government has informed the company that it will pay compensation of INR 144.9 billion towards under-recoveries on the sale of domestic LPG up to Mar. 31, 2025, and likely to be incurred up to Mar. 31, 2026. Compensation for under-recoveries will be disbursed in 12 equal monthly instalments, from November and thereafter disbursed accordingly, the company said in notes accompanying its earnings filing.
The company's net profit for the March quarter was INR 113.78 billion, up nearly 57% from INR 72.65 billion in the year-ago quarter. The revenue from operations for the quarter rose 7% on year to INR 2.33 trillion. The company's top line, net of excise duty, was INR 2.08 trillion.
India's largest state-owned oil marketing company did not share its gross refining margin for the March quarter or for FY26, stating that refining margins have been volatile and unstable, including in June quarter, owing to ongoing geopolitical uncertainties across the world. "If you see for the past five years itself, refining margins have been quite high as compared to the refining margins if you see the previous five-year period. So yes, refining margins are expected to remain high in next one or two years because of these uncertainties," the official said.
The gross refining margin shows a refinery's operational efficiency and is a key profitability metric for refiners. The Indian Oil official, on his part, said the company may revisit the issue and share its GRMs going forward but for now would refrain from sharing GRM till stability is achieved on the geopolitical front. The official said that net profit and earnings before interest, tax, depreciation and amortisation are better reflection of the company's financial performance, rather than gross refining margins.
The official also does not see company's refinery throughput to grow beyond 75 million tonne per annum on a standalone basis in FY27. For FY26, the company had recorded refinery throughput of 75.5 million tonnes per annum. Despite this, the company would spend a major share of INR-327-billion capex for FY27 on refining and pipeline segments, even as it proposes to spend INR 50 billion on renewables. And from FY28 onwards, the official said that the company may start seeing capex in refining reduce.
Talking of capex and operational expenses, the official stated that the company had achieved savings of nearly INR 22 billion during FY26 by reducing maintenance costs, and supply chain optimisation. "For next year, 2026-27, we are targeting savings of INR 25 billion from this initiative," the official said.
Tuesday, shares of Indian Oil closed at INR 135 per share on the National Stock Exchange, up 2.4%. End
Edited by Akul Nishant Akhoury
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