(Reuters) -Indian Oil Corp (IOC), the country’s top refiner, reported first-quarter profit below analysts’ estimates on Thursday, as inventory losses dented its refining margins.
The state-owned firm’s standalone net profit more than doubled to 56.89 billion Indian rupees ($649.13 million) for the quarter ended June 30.
Analysts had estimated a profit of 74.66 billion rupees on average, as per data compiled by LSEG.
Revenue from operations rose 1.2% to 2.19 trillion rupees.
KEY CONTEXT
Indian Oil, along with its unit Chennai Petroleum, controls about a third of India’s five million-barrel-per-day refining capacity.
IOC’s average gross refining margin (GRM)- the profit from making refined products from one barrel of oil – for the April-June period fell to $2.15 per barrel from $6.39 per barrel last year. The company said inventory losses impacted the GRM.
Fuel demand in India, the world’s No. 3 oil importer and consumer, witnessed an uptick during the quarter, while the costs of crude declined.
Peer HPCL posted a jump in quarterly profit earlier this month, boosted by higher marketing margins, while BPCL beat first-quarter profit estimates on lower costs, improved demand.
PEER COMPARISON
Valuation (next 12 Estimates (next 12 Analysts’ sentiment
months) months)
RIC PE EV/EBITDA Revenue Profit Mean No. of Stock to Div
growth (%) growth (%) rating* analyst price yield
s target** (%)
Indian Oil 9.05 6.85 -2.32 43.00 Buy 20 0.88 2.14
Corporation
Hindustan Petroleum 7.64 6.73 -3.12 38.36 Buy 14 0.89 2.56
Corp
Bharat Petroleum 9.64 6.67 -2.88 10.43 Buy 21 0.89 3.13
Corporation
Reliance Industries 21.91 10.87 5.60 14.50 Buy 31 0.84 0.40
* The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** The ratio of the stock’s last close to analysts’ mean price target; a ratio above 1 means the stock is trading above the PT
APRIL-JUNE STOCK PERFORMANCE
— All data from LSEG
— $1 = 87.6400 Indian rupees
(Reporting by Manvi Pant; Editing by Ronojoy Mazumdar)
