IOC Q2 Earnings Plunge on Inventory Losses, Operations Strong

New Delhi, Oct 29 (PTI) Indian Oil Corporation's (IOC) massive 98.6 per cent drop in second-quarter earnings was mainly due to inventory losses even as the operating performance was robust, a top official said Tuesday.

The company posted a standalone net profit of Rs 180.01 crore in the second quarter of the current 2024-25 fiscal year compared to a profit of Rs 12,967.32 crore a year back, according to a stock exchange filing by the company. The profit also declined sequentially, when compared to an earning of Rs 2,643.18 crore in the April-June period.

IOC Director (Finance) Anuj Jain said the company suffered over Rs 4,200 crore of inventory loss in July-September against an inventory gain of about Rs 8,300 crore a year back.

IOC is India's largest oil refining and marketing company, controlling about half of the market. Being the backbone of the Indian fuel supply system, it has to maintain stocks and supplies irrespective of price or the carrying cost of it. Seven out of the nine refineries of the company are inland, and the company holds up to 45 days of crude oil inventory.

The company has historically booked inventory losses whenever global oil prices have fallen, he said.

IOC earned only USD 1.59 on turning every barrel of crude oil into fuel in the second quarter compared to a gross refining margin of USD 18.11 per barrel a year back.

"The inventory losses and fall in refining margins more or less make up for the difference in the previous year and this year's earnings," he said.

In addition to the above, IOC had an under-recovery on LPG of Rs 8,870.11 crore as of September 30, the filing showed.

IOC sold 21.931 million tonnes of petroleum products during the second quarter as compared to 21.941 million tonnes a year back and 24.063 million tonnes in the April-June period.

Its refineries processed 16.738 million tonnes of crude oil, down from 17.772 million tonnes in July-September 2023 and 18.168 million tonnes in April-June 2024, it said.