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New Delhi: State-owned Indian Oil Corporation (IOC) on Friday reported its highest-ever quarterly standalone net profit of Rs 21,630.03 crore for the July-September quarter of FY27, driven by improved refining economics and strong earnings from its petrochemical and gas businesses, even as losses on retail fuel sales and an unmet LPG subsidy burden weighed on operations.
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The country's largest oil marketing company posted a nearly threefold increase in net profit from Rs 7,610.45 crore in the corresponding quarter last year. The turnaround was even sharper sequentially, with IOC recovering from a standalone net loss of Rs 2,661.37 crore in the April-June quarter.
The record quarterly profit represents more than half of IOC's highest-ever annual net profit of Rs 39,619 crore, achieved in FY24.
IOC's exceptional performance was supported by favourable crude oil price movements and improved margins across its downstream businesses.
In a statement, the company said, "the current quarter's profitability was largely driven by temporary decline in crude oil prices from mid-June to mid-August and robust margin from petrochemical and gas (business)."
The gains helped offset pressure on fuel marketing operations, where retail petrol and diesel prices have remained unchanged since the second half of May despite higher crude oil prices.
However, unlike its public sector peers Hindustan Petroleum Corporation Ltd (HPCL) and Bharat Petroleum Corporation Ltd (BPCL), IOC did not disclose its gross refining margin (GRM) for either the September quarter or the first half of FY27.
The absence of this key profitability indicator makes it difficult to assess how much of the company's record earnings came from underlying refining margins and how much was attributable to favourable inventory and crude price movements.
The record profit came despite an unmet LPG subsidy burden of Rs 32,505.69 crore during the quarter, underscoring the financial pressures associated with government-regulated domestic cooking gas prices.
While stronger earnings from refining and other businesses helped absorb these pressures during the quarter, the substantial subsidy gap remains a concern for the company's financial performance.
IOC also cautioned that the exceptional profitability may not be sustainable if crude oil prices decline further.
"However, the profitability in upcoming quarters may be adversely impacted by inventory losses due to potential fall in crude oil prices with normalisation of situation in the Middle East."
The warning suggests that the same crude price volatility that supported IOC's September-quarter earnings could adversely affect profitability in subsequent quarters.
IOC's revenue from operations increased to Rs 2.63 lakh crore during the quarter from Rs 2.03 lakh crore in the corresponding period last year.
Pre-tax earnings from petroleum product sales more than doubled to Rs 24,935.01 crore.
The petrochemicals business also registered a strong improvement, with pre-tax profit nearly tripling to Rs 528.40 crore.
The gas business delivered an even sharper increase, with pre-tax earnings surging to Rs 1,237.67 crore from Rs 243.49 crore a year earlier.
The performance reflects the growing contribution of IOC's diversified operations beyond conventional petroleum refining and fuel marketing.
Operational performance also strengthened during the quarter.
IOC's domestic petroleum product sales increased by more than one million tonnes year-on-year to 23.977 million tonnes.
Its refineries processed 18.108 million tonnes of crude oil, compared with 17.609 million tonnes in the corresponding quarter of the previous financial year.
Higher throughput and sales volumes provided additional support to the company's earnings.
For the first six months of FY27, IOC reported a standalone net profit of Rs 18,968.66 crore, compared with Rs 13,299.05 crore in the corresponding period last year.
The company had reported a full-year standalone net profit of Rs 36,802.42 crore in FY26.
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Despite the record September-quarter performance, the first-half numbers indicate that IOC's earnings remain exposed to significant volatility in international crude oil prices and domestic fuel pricing.
The key question now is whether IOC can sustain its improved operating profitability once the temporary benefits of favourable crude price movements fade. With retail fuel prices remaining controlled and substantial LPG subsidy support still unmet, the coming quarters will test the durability of the company's earnings recovery.
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