Indian Oil Corporation (IOCL) today announced a significant surge in its financial performance for the second quarter of fiscal year 2026. The state-run oil refiner reported a consolidated net profit of ₹7,817.55 crore, a stark contrast to the ₹169.58 crore net loss recorded during the same period last year. This impressive turnaround is primarily attributed to improved refining margins and a favorable base effect.
On a standalone basis, IOCL's net profit soared to ₹7,610.45 crore in Q2 FY26, marking a staggering 4,128% increase compared to the ₹180.01 crore profit in Q2 FY25. The company's revenue from operations also witnessed a healthy increase, rising by 4% year-on-year to ₹2,02,992.34 crore. On a consolidated basis, revenue from operations jumped 3.9% year-on-year to ₹2,06,447.11 crore.
The robust financial results were anticipated by the market, with IOCL's share price climbing nearly 3% ahead of the official announcement. The stock closed at ₹155.20 on the BSE, reflecting investor confidence in the company's performance.
Several factors contributed to IOCL's strong Q2 performance. Improved gross refining margins (GRMs) played a crucial role, with average GRMs rising approximately 55% to $6.32 per barrel. GRMs represent the revenue refiners earn from transforming crude oil into refined fuel products. The company also benefitted from lower inventory losses compared to the previous year, stronger diesel cracks, and reduced under-recoveries on LPG sales. Increased domestic retail sales further bolstered IOCL's bottom line, helping to offset marketing pressures.
The company's refining business demonstrated resilience, supported by steady throughput and improved diesel cracks. Furthermore, IOCL is expected to receive approximately ₹30 billion in government compensation to mitigate pricing and marketing adjustments during the quarter.
The surge in profitability marks a significant recovery for IOCL, which had faced challenges in the corresponding quarter of the previous year due to lower refining margins. The company's ability to capitalize on improved market conditions and optimize its operations has resulted in substantial gains.
The positive Q2 results are expected to further solidify investor confidence in IOCL, which remains a key player in India's energy infrastructure. The company's stock has already gained 11.67% year-to-date, reflecting its strong market performance.
