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Earnings

Indian Oil Corp Q1 results today: What you should watch out for

Updated : July 31, 2019 08:24 AM IST

Indian Oil Corporation (IOC) will be reporting its first-quarter earnings on Wednesday and analysts expect the oil refiner to post a weak set of numbers this time around.

  • In terms of the macro picture, crude prices were up on a year-on-year (YoY) basis but sequentially they were down but this time a lot of inventory losses will be seen which will be hurting the margins. Even the Singapore gross refining margins (GRMs) increased sequentially but were down on a YoY basis.

  • The revenue is expected to increase by 3 percent to Rs 1.29 lakh crore. The EBITDA would decline by 29 percent and all this leading to a decline in the operating profit margins by 260 basis points (bps). The profits also should decline by around 49 percent this time.

  • In the refining segment, weakness is expected, while the throughput will increase because they will get additional volumes from the Paradip refinery but the margins will be under pressure, so reported gross refining margins will see a decline of 38 percent sequentially at USD 2.4 per barrel but the core refining margins are expected to increase.

  • Apart from that, inventory losses this time around are expected to be between that Rs 1,100 crore and Rs 1,500 crore mark. So huge number as far as the inventory loss is concerned.
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