IOCL Q4 Preview: Indian Oil Corporation Ltd (IOCL), the state-owned energy major, is set to announce its fourth-quarter earnings for FY25 on Wednesday, April 30. Analysts are anticipating a subdued performance, largely due to weaker marketing margins, under recoveries in LPG, and pressure on refining spreads.
Domestic brokerage Nuvama Institutional Equities expects IOCL’s EBITDA to decline 42% year-on-year, though it may show a sequential growth of 69%, supported marginally by seasonal improvements. The decline is primarily attributed to weak refining segment performance, as benchmark Singapore Gross Refining Margins (GRMs) dropped 58% YoY amid softening global product cracks.
Refining throughput is estimated to have contracted by 2% YoY and 1% QoQ. While retail fuel margins saw strong growth on a year-on-year basis, they dipped quarter-on-quarter due to crude price volatility and a depreciating rupee, as per the brokerage.
Nuvama estimates diesel retail margins at ₹6/litre (+58% YoY, -29% QoQ) and petrol margins at ₹10/litre (+40% YoY, -21% QoQ). Domestic retail sales are projected to have risen 4% YoY in the March quarter.
The petrochemical segment is also expected to remain weak amid subdued realisations and narrow spreads.
YES Securities expects IOCL’s core/reported GRM at $5.3/$5.7 per barrel with refining and marketing throughput at 18.2 and 25.3 million metric tons, respectively.
The brokerage pegs blended gross marketing margins at ₹4.4/litre and anticipates core integrated EBITDA margin to shrink to $2.4 per barrel, down $2.3 YoY and $2.8 QoQ.
ICICI Securities said that the Q4FY25 performance of OMCs will likely be hit by weaker marketing margins and under-recovery in LPG. During the quarter, SG GRMs declined by USD 1.7/bbl QoQ. Marketing margins have slipped ₹3.5 and ₹2.5 per litre QoQ in petrol/diesel to ₹8.5 and ₹5.5 per litre, driving weakness in earnings.
Overall, while retail volumes and some margin recovery offer support, elevated input costs and global softness in refining could drag profitability, as per the analysts.
Stock price trend
Indian Oil Corporation’s share price has extended its winning streak to the second consecutive month in April, gaining another 6.26% so far, following a 12.51% jump in March. This rally comes after a sustained decline between October 2024 and February 2025, during which the stock lost 37.22% of its value.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
