IOC Q2 preview: OMC may post over 100% rise in net profit

Oil marketing player Indian Oil Corporation (IOC) is likely to post over 100 per cent growth in net profit in Q2 on Friday due to inventory gains during the quarter.

Brokerage Prabhudas Lilladher believes that IOC may post 247 per cent growth in profit after tax despite 24.10 per cent fall in sales.

“IOC is likely to report better results due to inventory gains, but core earnings will be weak,” it said.

An assessment by HDFC Securities shows that IOC may report 136.70 per cent YoY and 34.10 per cent YoY growth in net profit and EBITDA, respectively. On the other hand, the brokerage sees 18.60 per cent YoY drop in net sales.

Shares of the company on Thursday closed 1.10 per cent down at Rs 341.75 ahead of its financial results, while the benchmark BSE Sensex settled 0.43 per cent down at 39,749.

Japanese brokerage Nomura expects 140 per cent YoY growth in net profit of IOC with gross refining margins at $2.50 per barrel. The figure stood at $1.3 per barrel in Q2FY20.

In another update, Bharat Petroleum Corp (BPCL) on Thursday reported 58 per cent rise in September quarter net profit on the back of inventory gains and a rise in refining margin.

Consolidated net profit came at Rs 2,589.52 crore in Q2 compared to Rs 1,502.63 crore in the same period a year ago.

“We had excellent results both physically and financially. First-quarter refinery performance was dismal due to Covid-19 lockdown. Our strategy of buying crude oil prices at low prices in May and June has resulted in substantial refinery margin,” PTI reported quoting BPCL Director (Finance) N Vijayagopal.

The company earned $5.8 on turning every barrel of crude oil into fuel in the second quarter of the current fiscal as compared to a gross refining margin (GRM) of $3.38 per barrel.