Indian Oil Corp Q2 Preview: Profit likely to jump 47% sequentially, margin may improve by 80 bps

Indian Oil Corporation (IOC) will release its second-quarter earnings today, with analysts projecting steady revenue despite anticipated pressures from inventory losses and weak refining margins.

Standalone revenue is expected to decrease 6 per cent on a quarter-on-quarter (QoQ) basis to Rs 1,82,087 crore from Rs 1,93,236 crore in the previous quarter, according to Zee Business research. Indian Oil Corporation is expected to report a 47 per cent increase in its profit sequentially, with marketing margins supporting earnings despite weak refining performance.

Despite the revenue dip, IOC’s earnings before interest, taxes, depreciation, and amortization (EBITDA) are projected to rise by 13 per cent to Rs 9,724 crore, supported by a stronger margin of 5.3 per cent, compared to 4.5 per cent in the previous quarter, according to Zee Business research.

The analysts anticipate the oil marketing company's net profit to jump 47 per cent QoQ to Rs 3,890 crore from Rs 2,643 crore, primarily driven by stable auto fuel marketing margins. 

Gross refining margins (GRMs), a significant performance indicator for IOC, are seen at $2.9 per barrel for the blended rate, with reported GRMs likely at $5 per barrel. However, inventory losses and declining LPG business performance are expected to weigh on overall results.

The domestic LPG segment is projected to fall sharply to Rs 3,200 crore amid the impact of regulated pricing, contributing to an anticipated drop in refining profits.

This earnings release follows IOC’s Q1 FY25 results, where the company reported a consolidated net profit of Rs 3,722.63 crore, down 75 per cent year-on-year, largely due to weakened GRMs. Revenue for Q1 FY25 was also down by nearly 3 per cent year-on-year, underscoring the challenging refining landscape.

IOC Share Prices 

As of 1:01 PM on October 25, Indian Oil Corporation shares were trading at Rs 147.15, down 3.98 per cent from the previous close. The stock saw an intraday high of Rs 153.9 and a low of Rs 145.55. On the broader market, Sensex was also in the red, trading at Rs 79,325.72, down 0.92 per cent. Trading volumes for IOC on the NSE and BSE were notably higher, up 42.67 per cent compared to the previous session.