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What to Expect
Profit Surge: IOC is expected to report a profit of ₹6,140 crore, a significant rise from just ₹180 crore in Q2 FY25.
Revenue Growth: Revenue is projected to increase by 11% to ₹1.92 lakh crore, compared to ₹1.74 lakh crore in the previous quarter.
EBITDA Improvement: Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) is anticipated to reach ₹13,078 crore, up from ₹3,772 crore.
Margin Recovery: Operating margin is expected to improve to 6.8%, compared to 2.2% in Q2 FY25.
Crude and Throughput
Gross Refining Margin (GRM): Analysts expect GRM to be around $6.20 per barrel, a notable increase from $1.60 per barrel in the previous quarter, although lower than $13.50 per barrel year-on-year.
Crude Throughput: The volume of crude processed is expected to rise by 4% to 17.4 million metric tonnes (MMT), up from 16.7 MMT in Q2 FY25.
Sales: Sales of petroleum products are projected to increase by 1% to 22.2 MMT, compared to 21.9 MMT in the previous quarter.
Areas to Watch
Investors should pay close attention to several key factors during the earnings announcement:
Profit Growth Context: The significant profit rise is largely attributed to the weak base of Q2 FY25, where IOC reported its lowest earnings in the Oil Marketing Company (OMC) sector.
Auto Fuel Marketing and Refining: Healthy margins in auto fuel marketing and refining operations could signal a positive trend.
LPG Inventory Losses: Higher losses related to liquefied petroleum gas (LPG) inventory may negatively impact overall earnings.
Petrochemical Performance: The petrochemical segment may continue to struggle, with muted realisations and spreads affecting profitability.
In the second quarter, IOC faced significant challenges. Revenue declined by 9.8% to ₹1.74 lakh crore, falling short of market expectations. EBITDA saw a steep drop of 56.3%, reaching only ₹3,773 crore, while the operating margin fell to just 2.2%, down from 4.5% in the previous quarter. The Profit After Tax (PAT) was reported at ₹180 crore, a dramatic decline from ₹2,643 crore, indicating the financial pressures the company was under during that period.