Earnings

Indian Oil Q3 earnings preview: Here's what to expect

Updated : January 29, 2020 11:14 AM IST

Q2FY20 for IOC was quite weak impacted by shutdowns, high inventory losses and delayed monsoons that impacted demand for fuel.

IOC has been an underperformer in last 1 year with the stock price declining almost 17 percent.

Since the news of BPCL divestment and reports that IOC has been looking at bidding for BPCL, the stock has been quite volatile.

Indian oil corporation (IOC) will release its results for the October-December quarter of the financial year 2019-20 on January 30. IOC will be the first oil marketing company to report numbers for Q3FY20. The stock has been an underperformer in last 1 year with the stock price declining almost 17 percent. Since the news of BPCL divestment and reports that IOC has been looking at bidding for BPCL, the stock has been quite volatile.

Here's what to expect from Indian Oil in Q3 of FY20:

Q2FY20 for IOC was quite weak impacted by shutdowns, high inventory losses and delayed monsoons that impacted demand for fuel.

For this quarter, CNBC TV18 poll expects an improvement in performance on a quarter on quarter (QoQ) basis as inventory gains are likely to be higher due to the crude price movement and company’s inventory cycle.

Revenue is expected to be flat at Rs 1.19 lakh crore, as against 1.1 lakh crore QoQ. Earnings before interest, tax, depreciation and amortization (EBITDA) is likely to shoot up considerably to Rs 6,897 crore, which is a 93 percent jump on a QoQ basis due to inventory gains leading to profit after tax (PAT) expectation of Rs 2,593 crore vs Rs 563 crore QoQ.

The reported GRMs are expected to come in at $2.6 per bbl, as against $1.3/bbl QoQ. The inventory gains should hover around $1-1.2 per bbl, the poll said.

Refinery throughput is expected to improve QoQ as last quarter saw significant shutdowns.

Other thing to watch out for will be the costs related to BS VI fuel as IOCL still needs to transition some refineries to BS VI.

Domestic marketing sales are also expected to go up as October and November saw some improvement in fuel oil demand which will show in the volumes. In Q3, domestic marketing sales are expected at 20.7 MMT and the margins are expected at Rs 4.9 per litre as diesel demand has been steady while LPG demand has gone up. Also, petrol consumption has been on the higher side.

Investors will also closely watch out for company’s capex plans, the new project pipelines and also, the company’s willingness to bid for BPCL.

Indian Oil Q3 earnings preview: Here's what to expect

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