Indian Oil Posts Record Rs 21,630 Crore Q2 Profit as Refining Margins Outrun a Rs 32,500 Crore LPG Hit

Indian Oil Corporation (IOC) on Friday reported the biggest quarterly profit in its history, a standalone net profit of Rs 21,630 crore for July-September, as a brief window of cheaper crude let its refineries earn fat margins even while its fuel pumps sold petrol and diesel at a loss.

The figure compares with Rs 7,610 crore in the same quarter last year, a jump of about 184%, and marks a dramatic reversal from the Rs 2,661 crore loss the state-run refiner booked in April-June. Earnings per share rose to Rs 15.71 from Rs 5.53. To put the number in context, a single quarter delivered more than half of IOC's best-ever full-year profit of Rs 39,619 crore, set in FY24.

A two-month window did the heavy lifting

IOC was unusually direct about where the money came from. The company said the quarter's profitability was largely driven by a temporary fall in crude oil prices between mid-June and mid-August, along with strong margins in its petrochemical and gas businesses.

That timing mattered because retail prices of petrol and diesel have been held unchanged since the second half of May. When crude eased, the gap between what IOC paid for oil and what it earned from refined products widened sharply. Pre-tax profit from the petroleum products segment more than doubled to about Rs 24,935 crore from Rs 11,269 crore a year ago.

The smaller businesses also chipped in. Pre-tax profit from petrochemicals nearly tripled to Rs 528 crore, while the gas business earned Rs 1,238 crore against just Rs 243 crore a year earlier.

Volumes helped too. Domestic sales rose by more than a million tonnes to about 23.98 million tonnes, and refineries processed 18.11 million tonnes of crude compared with 17.61 million tonnes in the year-ago quarter. Revenue from operations climbed roughly 30% year on year to Rs 2.63 lakh crore, though it slipped 4.7% from the previous quarter.

The LPG drag has not gone away

The headline profit came despite a large hole in the cooking gas business. IOC carried an unmet LPG subsidy burden of about Rs 32,506 crore during the quarter, a reminder of how government-controlled domestic LPG pricing continues to weigh on oil marketing companies. The company recognised Rs 7,243 crore in government compensation for LPG under-recoveries across the first half, a fraction of the shortfall.

IOC also did not disclose its gross refining margin for the quarter or the half-year, even though peers HPCL and BPCL published theirs last week. That makes it harder for investors to separate how much of the gain came from refining spreads versus inventory effects.

Management flags the risk ahead

Rather than extrapolate the result, IOC cautioned that profitability in upcoming quarters could be hurt by inventory losses if crude prices fall as the situation in the Middle East normalises. In plain terms, a refiner holding oil bought at higher prices loses money on paper when prices drop, so the very de-escalation that would ease India's import bill could dent IOC's next few quarters.

For the first half of FY27, standalone profit stood at about Rs 18,969 crore, up 43% from Rs 13,299 crore a year earlier and already more than half of the Rs 36,802 crore it earned in all of FY26.

A governance footnote worth watching

The statutory auditors gave an unmodified limited review, but they highlighted that IOC does not currently have the prescribed number of independent and non-executive directors. As a result, the audit committee and other mandatory board committees remain discontinued, a compliance gap that market watchers are likely to keep an eye on for India's largest refiner.

This is an original summary based on public reporting. See our editorial policy for how we source, write, and correct our stories.