Indian Oil Corporation Ltd. (IOC), India’s largest state-run refiner and fuel retailer, reported a sharp jump in earnings for the first quarter of FY26. Consolidated net profit more than doubled year-on-year to ₹5,689 crore, supported by strong refining and marketing margins, even as the company absorbed significant inventory losses.
Indian Oil Corporation Ltd., headquartered in New Delhi, is a diversified energy major operating across refining, pipeline transportation, fuel marketing, petrochemicals, and alternative energy solutions. The company plays a critical role in safeguarding India’s energy security, with a dominant share in the domestic petroleum products market.
For the quarter ended June 2025, Indian Oil reported a net profit of ₹5,689 crore, compared with ₹2,643 crore in the same period last year. Revenue from operations stood at ₹2,18,608 crore, reflecting a modest 1% growth year-on-year.
Key Drivers of Profitability
The sharp earnings growth was primarily driven by improved refining and marketing margins, which helped offset an inventory loss of ₹6,465 crore. In comparison, IOC had booked an inventory gain of ₹3,345 crore in Q1 FY25.
The company’s gross refining margin (GRM) came in at $2.15 per barrel, down from $6.39 per barrel a year earlier. However, after adjusting for inventory impact, the GRM rose sharply to $6.91 per barrel, versus $2.84 per barrel last year — underscoring higher operational efficiency and strong throughput.
Domestic fuel retailers — Bharat Petroleum Corporation Ltd. (BPCL), Hindustan Petroleum Corporation Ltd. (HPCL), and IOC — collectively benefited from healthy marketing margins, as retail petrol and diesel prices remained unchanged in India despite falling global crude oil prices.
Subsidy and LPG Under-Recovery
During the quarter, IOC recorded an under-recovery of ₹3,858 crore on sales of domestic LPG cylinders, slightly better than the ₹4,294 crore loss reported in the previous year. The Government of India has already announced a ₹30,000 crore support package to compensate state-run oil marketing companies for LPG-related losses, with disbursement mechanisms yet to be finalized.
Also Read: Indian Oil Stock Declines Before Quarterly Results
Operational Highlights
- Sales Volume: IOC achieved record sales of 26.32 million metric tonnes (MMT), up from 25.25 MMT last year.
- Domestic Market Growth: Petroleum product sales grew 4.2%, outpacing the industry average of 3.9%.
- Diesel Demand: Institutional diesel sales surged 40.3%, far exceeding the industry growth rate of 14.8%.
- Refinery Utilisation: Average refinery capacity utilisation remained robust at 107%, showcasing efficient operations across plants.
Market Reaction
On the stock market, shares of Indian Oil Corporation, which has a market capitalization of nearly ₹1.98 lakh crore, closed 1.58% lower at ₹140.15 apiece on Thursday. The decline came despite strong quarterly earnings, while the benchmark BSE Sensex ended the session flat.
READ MORE ON
