Q2 Results: IOC’s Profit Halves As Employee Cost Soars 

Indian Oil Corporation Ltd.'s net profit fell well short of analysts’ estimates in the July to September quarter, even as its revenue performance surpassed expectations.

Net profit fell 52 percent quarter-on-quarter to Rs 3,250 crore, according to the state-run firm’s exchange filing. That's much lower than the Rs 5,120-crore consensus estimate of analysts tracked by Bloomberg.

Other income soared 78 percent to Rs 1,041 crore, but the gains were offset by factors including rising employee cost, drop in the rupee, and inventory challenges triggered by rising crude prices.

• Employee cost jumped 56 percent to Rs 3,706 crore, due to one-time contribution for superannuation benefits.
• The rupee depreciated 5.87 percent in the period.
• Brent crude averaged $75.89 per barrel in the quarter, a 1 percent increase compared to the previous quarter.

Net revenue rose 1.98 percent to Rs 1.52 lakh crore, beating the Rs 1.36 lakh crore estimate.

Other Highlights

• Earnings before interest, tax, depreciation and amortisation dropped 46.23 percent to Rs 6,762 crore, compared with the Rs 9,495-crore estimate.
• Ebitda margin contracted to 5.12 percent from 9.71 percent. Analysts had expected margin to come in at 7 percent.
• Crude throughput rose 21 percent to 21.37 million metric tonnes.
• Sales volume fell 8 percent to 19.82 MMT.

Shares of Indian Oil Corporation rose as much as 6.7 percent to Rs 151.4, before paring some of its gains. The stock has declined 24 percent over the last 12 months compared with a 5.5 percent gain in the benchmark S&P BSE Sensex Index.