InvestorQ : Why did the profits of Indian Oil Corporation fall so sharply in fourth quarter?
Rutuja Nigam made post

Why did the profits of Indian Oil Corporation fall so sharply in fourth quarter?

Answer
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2 months ago
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For Q4FY22, Indian Oil Corporation (IOCL) saw top line revenues grow by 26.14% to Rs209,049 crore. FY22 full year revenues were up 41.6% at Rs736,731 crore for IOCL. Both the refining and marketing business as well as the petrochemicals business grew sales at over 25% in the quarter. The gross refining margins for IOCL were robust in the quarter at above $11/bbl. At the same time, IOCL took a dent on petchem margins which contracted. In addition, the margins on retailing petrol and diesel were hit by static fuel prices.

Indian Oil

Rs in Crore

Mar-22

Mar-21

YOY

Dec-21

QOQ

Total Income (Rs cr)

₹ 2,09,049

₹ 1,65,734

26.14%

₹ 1,99,375

4.85%

Net Profit (Rs cr)

₹ 6,646

₹ 9,026

-26.38%

₹ 6,143

8.18%

Diluted EPS (Rs)

₹ 7.24

₹ 9.83

₹ 6.69

Net Margins

3.18%

5.45%

3.08%

  

Now let me turn to your key question on the fall in profits. For Q4FY22 net profits of IOCL were lower by -26.38% at Rs6,646. If you look at the segmental operating performance; EBIT of the petroleum business was flat at Rs9,618 crore. That is largely because the gains of better GRM and inventory translation were offset by the sharp fall in retailer margins since retail fuel prices were not hiked between November and March. Petchem operating profits fell 75% yoy due to a input cost spike. IOCL declared 1:2 bonus issue and final dividend of Rs3.60 per share on pre bonus shares.

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