Indian Oil Q4 FY25 Profit Jumps 50% on Inventory Gains

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Indian Oil Q4 FY25: Profit Surges on Inventory Gains Amidst Market Dynamics May 09 2025Results

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Indian Oil Corporation (IOC), India's leading oil refiner and marketer, reported a significant turnaround in its financial performance for the fourth quarter of FY25, driven by inventory gains and strategic operational decisions.

Financial Highlights

Standalone Net Profit: Rs 7,264.85 crore, a 50% increase from Rs 4,837.69 crore in Q4 FY24.
Revenue from Operations: Rs 1,94,967.02 crore, down 1.52% year-on-year.
Gross Refining Margin (GRM): $7.85 per barrel, compared to $8.39 per barrel in the same period last year.
Final Dividend: ?Rs per equity share for FY25.

The surge in net profit is primarily attributed to inventory gains resulting from rising crude oil prices during the quarter. Brent crude prices increased by approximately 17% from a multi-year low in September, leading to favorable inventory valuations for IOC.

Operational Performance

Despite a slight decline in revenue, IOC's operational metrics remained robust:

Refinery Throughput: 18.548 million metric tonnes (MMT), up 1.45% year-on-year.
Domestic Sales: 24.601 MMT, a 3.63% increase from the previous year.
Export Sales: 1.344 MMT, down 12.84% year-on-year.

The company's focus on optimizing its refining operations and enhancing domestic market penetration contributed to these positive outcomes.

Segment-wise Performance

Petroleum Products: Revenue stood at Rs 2,03,732.30 crore, a 2.18% decrease year-on-year.
Petrochemicals: Revenue increased by 4.59% to Rs 7,225.87 crore.
Gas: Revenue rose by 17.90% to Rs 11,189.69 crore.

While the petrochemicals segment faced challenges, the gas segment's performance was bolstered by increased demand and strategic pricing.

Strategic Initiatives

IOC is actively pursuing several strategic initiatives to strengthen its market position:

Crude Procurement Strategy: The company plans to increase its spot crude purchases to 45% of total imports, up from 40% last year, to enhance supply flexibility and explore new oil grades.
Petrochemical Expansion: IOC aims to invest up to Rs 1 trillion to expand its petrochemical capacity, reinforcing its commitment to meeting India's growing energy demands.

Annual Performance Overview

For the full fiscal year FY25, IOC reported:

Consolidated Net Profit: Rs 13,507.84 crore, a 68% decline from Rs 41,729.69 crore in FY24.
Revenue from Operations: Rs 8,59,362.73 crore, down 2% year-on-year.

The annual decline in profit is primarily due to falling global crude prices and the absence of government compensation for LPG subsidies, which amounted to losses of Rs 5,601 crore.

Management Commentary

IOC's Chairman, A.S. Sahney, expressed optimism about the company's future, stating, "Our performance has improved on all physical parameters and so has our efficiency. We have started to regain market share."

Market Response

Following the announcement of the Q4 results, IOC's share price witnessed a positive movement, trading 1.92% higher at Rs 138.35 on the BSE.

Outlook

Looking ahead, IOC's strategic focus on diversifying crude sources, expanding petrochemical capacities, and enhancing operational efficiencies positions the company to navigate the dynamic energy landscape effectively.

For more information, visit https://www.indiratrade.com/

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