State-run Indian Oil Corporation (IOC) on Tuesday reported a 55 per cent Y-o-Y growth in consolidated net profit at ₹10,290 crore for the March quarter in FY23 helped by strong refining margins and softening international crude oil prices which buoyed marketing margins.

On a sequential basis, the country’s largest oil marketing company’s (OMC) net profit surged manifold from ₹773 crore in Q3 FY23.

The Maharatna company’s consolidated total income rose 11 per cent Y-o-Y to ₹2.32-lakh crore in Q4. On a Q-o-Q basis, its total income fell marginally from ₹2.34-lakh crore in Q3 FY23.

After the Russia-Ukraine conflict, the international crude oil prices rose to a record $138 per barrel in March 2022. The prices have now come down to the level of $75.

Domestic OMCs have not revised retail prices of petrol and diesel since April 6, 2022 and as a result incurred heavy under recoveries. However, as international crude oil prices started to soften since Q4 2022, the companies have been witnessing a positive impact on their marketing margins, which is reflected in their Q4 FY23 results.

ICICI Securities said that IOC achieved a crude throughput of 19.2 million tonnes (mt) in Q4 FY23 — up 5.4 per cent Q-o-Q higher than I-direct estimate of 18.6 mt. Reported GRMs came in at $15.3 a barrel higher than the I-direct estimate of $10.

Operating profit improves

“IOC’s operating profit improved Q-o-Q due to strong refining margins and improvement in marketing segment performance. In the current quarter (Q1 FY24), GRMs are likely to remain subdued but are expected to be countered by strong marketing margins. However, we expect GRMs to improve in H2 FY24 on account of anticipated increase in demand. The company also has expansion plans and intends to increase its consolidated refining capacity from 80.55 mtpa to 107 mtpa by 2024-25,” it added.

IOC, in its results filing with the BSE, said that its average Gross Refining Margin (GRM) for FY23 stood at $19.52 per barrel against $11.25 in FY22. The core GRM or the current price GRM for FY23 after offsetting inventory loss/gain comes to $20.14 per barrel. However, the suppressed marketing margins of certain petroleum products have offset the benefit of increase in GRM.

Other expenses for FY23 includes a foreign exchange loss of around ₹7,161.81 crore against ₹1,452.28 crore in FY22. For the March quarter, it reported a foreign exchange gain of around ₹1,018.04 crore against a loss of ₹1,021.20 crore in the same quarter in FY22.

The company’s board has recommended a final dividend of 30 per cent for FY23 — ₹3 per equity share on the paid-up share capital subject to the approval of the shareholders at the ensuing Annual General Meeting (AGM) of the company.