(Reuters) -Indian Oil Corp, the country’s top refiner, reported a multi-fold jump in second-quarter profit on Monday, boosted by stronger refining margins due to a decline in international crude oil prices.
The state-owned firm’s standalone net profit rose to 76.10 billion rupees ($865.8 million) for the quarter ended September 30, from 1.80 billion rupees a year ago.
Revenue from operations rose 4% to 2.03 trillion rupees. A 7.5% drop in input costs lowered Indian Oil’s total expenses by 1.5% to 1.94 trillion rupees.
KEY CONTEXT
Indian Oil, along with its unit Chennai Petroleum, controls about a third of India’s 5-million-barrel-per-day refining capacity.
Its average gross refining margin, the profit from making refined products from one barrel of oil, for the April-September period rose to $6.32 per barrel from $4.08 per barrel a year earlier. The September-quarter margin was at $10.6 per barrel.
Fuel demand in India, the world’s No. 3 oil importer and consumer, fell in July year-on-year, but rose in August and September, while the costs of crude declined during the quarter.
Indian oil refiners are increasing gasoline and diesel exports to their highest in several years, driven by expanded crude processing capacity and increased domestic ethanol blending that has freed up fuel supplies for overseas markets, traders and analysts said.
PEER COMPARISON
Valuation (next Estimates (next 12 Analysts’ sentiment
12 months) months)
RIC PE EV/EBITDA Revenue Profit Mean No. of Stock to Div
growth (%) growth (%) rating* analyst price yield
s target** (%)
Indian Oil 9.00 6.78 1.01 25.70 Buy 18 0.95 2.00
Corporation
Hindustan Petroleum 7.53 6.95 -0.11 21.03 Buy 14 0.94 2.39
Corp
Bharat Petroleum 8.14 6.33 1.62 4.66 Buy 20 0.89 3.03
Corporation
Reliance Industries 22.53 11.40 6.34 12.85 Buy 34 0.86 0.38
* 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
JULY-SEPTEMBER STOCK PERFORMANCE
— All data from LSEG
— $1 = 87.8950 Indian rupees
(Reporting by Anuran Sadhu in Bengaluru; Editing by Sherry Jacob-Phillips)
