Indian Oil Corporation (IOC) recently announced its quarterly results for the period ending September 2023, and the numbers are nothing short of remarkable. After a challenging year in 2022, the company has made a stunning recovery, posting a standalone net profit of Rs 12,967 crore, a significant turnaround from the loss of Rs 272 crore reported in the same quarter the previous year. In addition to this robust performance, the company’s board has declared an interim dividend of Rs 5 per share for the fiscal year 2023-2024. With sound financial parameters, is Indian Oil Corporation stock worth your investment? Check out the article.
Strong Financial Performance
One of the most eye-catching aspects of IOC’s recent financial performance is the impressive net profit of Rs 12,967 crore, which marks a substantial improvement from the loss of Rs 272 crore recorded in the same period last year. This remarkable recovery can be attributed to a combination of factors, including improved refining margins and cost management strategies.
Revenue from operations for the quarter, however, fell by 11% to Rs 2.02 lakh crore when compared to Rs 2.28 lakh crore in the corresponding quarter of the previous year. Despite this decline in revenue, IOC’s ability to post a significant profit indicates its resilience in the face of challenging market conditions.
Dividend Declaration
The company’s Board of Directors has shown its confidence in IOC’s financial stability by announcing an interim dividend of Rs 5 per share for the year 2023-2024. This dividend will be paid to eligible shareholders on or before November 30, with the record date set as November 10.
Weekly Chart of IOC Stock
In addition to its impressive financial performance, it’s essential to highlight Indian Oil Corporation’s stock performance. The company’s stock has given massive returns of more than 100% in the last three years.
In 2020, the stock was trading at approximately 50 rupees per share, but by 2023, it crossed the mark of 100 rupees per share. This surge represents a more than 100% increase, making IOC’s stock an attractive choice for investors. With such impressive returns and the company’s robust financial standing, it’s no wonder that this stock has captured the attention of smart investors looking for growth opportunities.
Improving Profitability
The profit before tax (PBT) for the reporting quarter stood at an impressive Rs 17,170 crore, marking a significant improvement from the loss of Rs 244 crore in the same period the previous year. The core gross refining margin (GRM) for the reporting period, after accounting for inventory gains and losses, was $12.60 per barrel. Despite the drop in the average GRM to $13.12 per barrel for the period from April to September, it is worth noting that IOC’s profitability remains robust.
Segment-Wise Performance
In terms of revenue from various segments, petroleum product revenues declined by 12% to Rs 1.90 lakh crore in the second quarter compared to Rs 2.17 lakh crore in the year-ago quarter. On the other hand, the petrochemicals segment reported a notable increase, with revenue rising by 19% year-on-year to Rs 6,613 crore. Revenue from other business activities also showed marginal growth, coming in at Rs 9,138 crore for the quarter.
Outstanding Half-Year Results
For the half-year ended September 2023, Indian Oil reported a substantial profit of Rs 26,718 crore, in stark contrast to the loss of Rs 2,265 crore in the same period the previous year. While revenue for the first half of the fiscal year was down from Rs 4.80 lakh crore to Rs 4.23 lakh crore, IOC’s financial recovery remains a commendable achievement.
For investors looking into potential opportunities in the Petroleum and natural gas sector, IOC’s impressive growth, coupled with supportive government initiatives, makes it a notable option. However, due diligence and individual financial goals should guide investment decisions.
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