- News Updates
- PSU Watch
- Defence News
- Policy Watch
- हिन्दी न्यूज़
- Jobs Watch
- States News
- Event News
New Delhi: Indian Oil Corporation's (IOC) standalone net profit for FY2025-26 surged to Rs 36,802 crore from Rs 12,962 crore in FY25, a 184 percent jump. On a consolidated basis, which includes subsidiaries such as Chennai Petroleum Corporation Limited (CPCL) and overseas entities, net profit attributable to equity holders of the parent came in at Rs 42,096 crore against Rs 13,598 crore in FY25 — a 210 percent rise. Total consolidated net profit including minority interest stood at Rs 43,677 crore versus Rs 13,789 crore, up 217 percent.
Follow The PSUWatch Channel on WhatsApp
These are striking numbers, but they require careful contextualisation. FY25 was an unusually depressed year for IOC — the company bore the brunt of massive LPG under-recoveries with little government compensation, compressing margins severely. The recovery in FY26 reflects better refining and marketing margins, higher throughput, and critically, the recognition of Rs 6,035.85 crore of government LPG compensation as revenue from November 2025 to March 2026. Without this, the profit numbers would look considerably different.
Revenue from standalone operations rose 5 percent to Rs 8,86,224 crore from Rs 8,45,513 crore. Consolidated revenue from operations grew similarly to Rs 9,01,453 crore from Rs 8,59,363 crore. The standalone operating margin expanded dramatically to 5.84 percent from 2.11 percent in FY25, and the net profit margin improved to 4.15 percent from 1.53 percent.
The tripling of profits masks several important nuances. The profit before tax at the standalone level was Rs 48,784 crore against Rs 15,882 crore in FY25, but FY25's number included Rs 1,838 crore of exceptional income from VAT input tax credit reversals following Supreme Court and Gujarat VAT Tribunal orders. FY26 has no such exceptional items. Adjusting for this, the underlying improvement is genuine, but it is partly structural (margin recovery) and partly one-time (LPG compensation recognition).
Excise duty at the standalone level jumped 13.4 percent to Rs 1,02,067 crore from Rs 89,563 crore — a significant cost escalation that while passed through to consumers, inflates both revenue and expense lines and can distort margin comparisons if not accounted for.
Finance costs fell 8.7 percent to Rs 7,969 crore from Rs 8,732 crore at the standalone level, and from Rs 9,259 crore to Rs 8,308 crore at the consolidated level, a meaningful improvement attributable to lower short-term borrowings. The standalone debt-equity ratio improved sharply to 0.54 from 0.75 a year ago, and short-term borrowings fell from Rs 82,937 crore to Rs 58,288 crore. The interest service coverage ratio improved to 7.98 times from 4.02 times.
Two significant impairment charges warrant attention. During the year, IOC recognised an impairment loss of Rs 1,212.42 crore against non-fossil and off-gas based fuel production facilities, which were reclassified as independent cash generating units based on prevailing market conditions. Additionally, during Q4, the company recognised an impairment loss of Rs 1,219.57 crore against its investment in IndOil Global BV based on an independent valuation. Together, these two items totalling Rs 2,431 crore dragged impairment losses on financial assets to Rs 2,361 crore at the standalone level, up from just Rs 143 crore in FY25. The write-down on IndOil Global BV signals deterioration in the value of overseas operations that deserves monitoring.
Despite the government approving compensation of Rs 14,486 crore for LPG under-recoveries up to March 2026, IOC's cumulative net negative LPG buffer widened to Rs 23,101.56 crore as of March 31, 2026, from Rs 19,926.09 crore a year earlier. This means the government compensation recognised so far has not been enough to close the gap between what the market price of LPG should be and what customers are charged. This will remain a key metric to watch for in the next quarter as well as all state-run oil retailers have been holding domestic LPG prices steady against an unprecedented disruption in supply chains following the West Asia conflict.
For the quarter ended March 31, 2026, standalone revenue from operations rose 7 percent year-on-year to Rs 2,32,855 crore from Rs 2,17,725 crore in Q4FY25. Standalone PAT jumped 57 percent to Rs 11,378 crore from Rs 7,265 crore, a strong recovery on a year-on-year basis.
However, on a sequential basis, standalone Q4 tells a more subdued story. Revenue was almost flat at Rs 2,32,855 crore versus Rs 2,31,769 crore in Q3FY26, a 0.5 percent rise. Profit before tax slipped 4.2 percent to Rs 15,322 crore from Rs 15,992 crore in Q3, and standalone net profit fell 6.2 percent to Rs 11,378 crore from Rs 12,126 crore. Earnings per share declined to Rs 8.26 from Rs 8.81 in Q3.
The consolidated picture in Q4 was more resilient. Consolidated revenue from operations was flat sequentially at Rs 2,36,899 crore versus Rs 2,36,257 crore in Q3. But consolidated profit before tax rose 11 percent sequentially to Rs 19,791 crore from Rs 17,827 crore, and consolidated net profit grew 12.4 percent quarter-on-quarter to Rs 15,176 crore from Rs 13,502 crore. On a year-on-year basis, consolidated Q4 PAT surged 81 percent from Rs 8,368 crore in Q4FY25, and consolidated EPS for the quarter rose to Rs 10.50 from Rs 5.90.
The divergence between standalone and consolidated Q4 performance suggests that subsidiaries, particularly CPCL, contributed meaningfully to group profitability in the final quarter.
On the operational side, FY26 delivered genuine records. Crude throughput at IOC's refineries reached 75.451 million metric tonnes, the highest ever, against 71.564 MMT in FY25, a 5.4 percent increase, with capacity utilisation at 107.4 percent. Total product sales hit 105.117 MMT, another record, with domestic volumes of 99.904 MMT growing 4.8 percent against industry growth of 4.3 percent, indicating market share gains.
The standout performer was HSD-Institutional sales, which grew 21.2 percent against an industry increase of 7.2 percent. Pipeline throughput crossed 105.556 MMT, up 5 percent. Petrochemical sales grew 4.4 percent to 3.294 MMT. Exports grew from 4.917 MMT to 5.213 MMT.
In Q4, crude throughput of 19.732 MMT was up from 19.427 MMT in Q3 and 18.548 MMT in Q4FY25. Domestic product sales of 26.065 MMT were marginally ahead of Q3's 26.015 MMT and up sharply from 24.601 MMT a year earlier.
The auditors drew attention to a note disclosing that as of March 31, 2026, IOC had three crude oil shipments valued at Rs 5,411.83 crore and five LPG shipments valued at Rs 618.64 crore stranded in the Persian Gulf region due to the West Asia conflict. The company said all shipments were adequately covered through insurance and that all five LPG shipments had been received by May 18, 2026. The company also noted that FY26 profitability was "largely insulated from the impact of these developments due to inventory procured at normal prices before the conflict."
The board has recommended a final dividend of Rs 1.25 per equity share (12.5 percent on face value of Rs 10). This is in addition to the interim dividend of Rs 7 per equity share already paid during the year, taking total dividend for FY26 to Rs 8.25 per equity share, a meaningful increase from FY25 levels.
Follow PSU Watch on LinkedIN
IOC did not have the minimum required number of independent directors, including a woman independent director, throughout FY2025-26. More critically, from March 28, 2026, the company had no independent directors at all. As a direct consequence, the Audit Committee, the Nomination and Remuneration Committee, and the CSR Committee were all discontinued and had not been reconstituted as of the date of reporting.
This means the financial results for FY26 — a year in which IOC reported its highest-ever profits and recognised Rs 6,000-plus crore of government compensation — were not reviewed by an Audit Committee before being approved by the board.
(PSU Watch– India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Google News. Click here to follow. Also, join PSU Watch Channel in your Telegram. You may also follow us on Twitter here and stay updated.)
