Indian Oil Corp. Ltd.'s quarterly profit jumped more than threefold as other income surged and demand for auto fuel improved after the nation eased lockdown curbs.
Net profit of the state-run oil marketer rose to Rs 6,227 crore in the quarter ended September from Rs 1,910 crore in the preceding three months, according to an exchange filing. That compares with the Rs 2,552.8-crore consensus estimate of analysts tracked by Bloomberg.
Its revenue rose 37% quarter-on-quarter to Rs 85,611 crore. Analysts had pegged the top line at Rs 84,585 crore.
Indian Oil's revenue was aided by recovering consumption. Petrol consumption rose 3.3% over the year ago in September. Diesel's demand still fell 6% year-on-year but that was less than a 20.7% drop in August. Diesel consumption is expected to revive as economic activity further picks up, and people opt for personal mobility over public transport amid fears of contracting the virus.
Indian Oil Q2 Results 2020-21: Key highlights (quarter-on-quarter)
- Operating profit rose 71% to Rs 9,427 crore.
- Other income rose 139% to Rs 1,537 crore.
- Operating margin expanded to 11% from 8.8% in the April-June period.
- Gross refining margin—what a company earns by converting one barrel of crude into fuel—stood at $3.46 a barrel against minus $1.98 a barrel in the preceding three months.
Refining margin for oil marketers took a hit after coronavirus lockdowns across the world hurt demand for refined products. A fall in spreads for gas oil, aviation turbine fuel and liquefied petroleum gas also hurt margin. But margin improved as demand picked up on easing restrictions.
Indian Oil's peer Bharat Petroleum Corp. Ltd., too, reported a rise in profit and gross refining margin in the reported quarter.
The price of Brent crude averaged at $43.1 a barrel during the quarter compared with $34 in the preceding three months.
Shares of Indian Oil were trading 2.7% higher after the quarterly results were announced, compared with a 0.4% drop in the benchmark Nifty 50 Index.
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