India’s largest oil marketing company, Indian Oil Corporation returned to profit in the first quarter of fiscal 2014-15 on the back a forex gain as compared to a loss last year and lower interest expenditure. During the quarter, the company’s net profit stood at ₹2,522.94 crore as against a loss of ₹3,093 crore in the same quarter last year.
The company’s Chairman B Ashok said the return to profit was primarily due to a foreign exchange gain of ₹128 crore as against a loss of over ₹4,000 crore last year, write-back of trust receivables of ₹343 crore as against a provisioning of ₹273 crore last year and ₹556 crore saving on interest expenses due to lower borrowing.
“As on June 30, 2014 our borrowing level was ₹68,953 crore as against ₹86,263 crore on March 31, 2014. Our borrowing came down due to a drop in the underrecovery of high speed diesel,” said Ashok, here on Tuesday.
During the quarter, the company’s net sales grew by 13.1 per cent to ₹1,22,754.89 crore as against ₹1,13,018.13 crore in the same quarter last year.
After the latest round of price hikes on August 1, which took the retail price of diesel to ₹58.40 a litre in Delhi, under-recovery on the product came down to ₹1.33 a litre.
Meanwhile, Ashok added that the company plans to start the crude unit at the Paradip refinery by December. He also said it is too early to comment on a partnership with Adani for a refinery on the West Coast as no plans have been finalised yet.
On Tuesday, IOC’s shares closed 3.58 per cent higher on the BSE at ₹ 340.95.