New Delhi: Oil India Limited (OIL) reported a sharp decline of over 35 percent in its standalone net profit for the financial year 2024-25, dragged down by substantial provisioning towards disputed service tax and GST on royalty payments. However, beneath the headline numbers, the company’s core operations showed resilience, with steady revenues, a rise in EBITDA, and strong segmental performance in both upstream and transport businesses.
The company’s standalone net profit fell to Rs 6,114 crore in FY25 from Rs 9,466 crore a year earlier, primarily due to a one-time provision of Rs 809 crore related to service tax and GST liabilities on royalty payments — an issue under legal dispute. Excluding this exceptional item, Oil India’s operating performance remained stable.
Revenue from operations on a standalone basis stood at Rs 22,130 crore, nearly flat compared to Rs 22,117 crore in FY24. However, the company managed to increase its EBITDA to Rs 11,005 crore in FY25, a 10 percent rise year-on-year, reflecting better operational efficiencies and cost control. The profit margin, however, narrowed significantly due to the exceptional expense, falling from 42.8 percent in FY24 to 27.6 percent in FY25 — a decline of 15.2 percentage points.
In the March quarter, the company reported a standalone net profit of Rs 1,591 crore, down 43 percent from the same quarter last year. Revenues, however, improved sequentially, rising 6 percent to Rs 5,519 crore, showing signs of recovery in offtake and pricing.
On a consolidated basis, which includes contributions from subsidiaries such as Numaligarh Refinery Limited (NRL), Oil India reported a net profit of Rs 6,980 crore for FY25, nearly unchanged from the previous year’s Rs 7,040 crore. Consolidated revenue stood at Rs 36,304 crore, marginally lower than the last year’s Rs 36,426 crore.
The company was able to offset the pressure from the royalty provisions at the standalone level through steady contributions from its downstream and joint venture businesses. Numaligarh Refinery, despite a year-on-year revenue dip, remained a key contributor to the bottom line, while the natural gas and crude oil segments posted healthy gains.
Crude oil remained the company’s single-largest revenue contributor in standalone operations, clocking in over Rs 12,495 crore in FY25 — an increase of nearly 7 percent over the previous year. Natural gas saw even stronger growth, rising more than 35 percent to Rs 1,734 crore, supported by better realisations and volumes. The pipeline transportation business also posted a solid performance, with revenues rising by nearly 9 percent. While LPG and renewable energy segments remained largely flat, they continued to provide portfolio diversity.
Profitability was particularly strong in the crude oil and gas segments. The natural gas segment, in particular, emerged as a bright spot for the company with improved margins and rising contribution to the overall earnings. On the consolidated front, the refining business at NRL continued to be the top revenue driver, although it saw an 11 percent drop in revenues due to margin pressures. Nevertheless, the steady performance of the upstream segments and pipeline business helped maintain overall stability.
Despite the hit to net profit, Oil India maintained its track record of shareholder payouts. The company declared a final dividend of Rs 1.50 per share, bringing the total dividend for FY25 to Rs 11.50 per share. This includes interim dividends of Rs 10 per share declared earlier in the year. The dividend decision underscores management’s confidence in the company’s cash flow and long-term fundamentals.
Oil India’s FY25 performance, though marred by a large tax-related provision, highlights the strength of its core business and the benefits of a diversified portfolio. With rising gas production, a steady refining arm, and a growing presence in renewables, the company is strategically positioned to weather regulatory headwinds. Oil India’s shares closed at Rs 426.50 apiece on Wednesday. The financial results were declared after the closing time of the share markets.
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