InvestorQ : Why did IOCL report losses in the September 2022 quarter?
Arya Nanda made post

Why did IOCL report losses in the September 2022 quarter?

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Anjana Aiyar answered.
4 weeks ago
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Let me first talk about the top line performance of IOCL for the September 2022 quarter. Net sales (net of excise) were up 56.7% at Rs2,08,754 crore on a consolidated basis. For the Q2FY23 quarter, the revenue from the core petroleum products refining surged yoy by 36% to Rs2,21,276 crore. On the other hand, the petrochemicals business saw sales fall -23.9% to Rs5,559 crore. The top line boost came from elevated crude oil prices as well as currency translation gains. Operating profits of petroleum business fell 90% due to imposition of special export duties on oil exports and weak gross refining margins (GRMs).

IOCL

Rs in Crore

Sep-22

Sep-21

YOY

Jun-22

QOQ

Total Income (Rs cr)

₹ 2,08,754

₹ 1,33,195

56.73%

₹ 2,23,414

-6.56%

Net Profit (Rs cr)

₹ -992

₹ 6,204

N.A.

₹ -279

N.A.

Diluted EPS (Rs)

₹ -0.72

₹ 4.50

₹ -0.20

Net Margins

-0.47%

4.66%

-0.13%

Despite such robust top line numbers, IOCL dipped into a net loss for the quarter, almost exactly and for the same reasons like the previous quarter. IOCL reported net loss of Rs-992 crore for Q2FY23 compared to net profit of Rs6,204 crore in the year ago quarter. It was a combination of the spike in additional duties and the lower gross refining margins. This turnaround from profit to loss yoy led to interest coverage ratio and debt service ratio deteriorating. Net profit margins at -0.47% in Q2FY23 is sharply lower than 4.66% in the year ago quarter. Losses are also wider than the sequential June quarter.

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