IndianOil: Slick affair
New Delhi   07-Aug-2007
Rising gross refining margins save the day for oil major IndianOil, like other marketing companies, was able to report an improved performance on a y-o-y basis in the June 2007 quarter, thanks to surging gross refining margins (GRMs). As a result, operating profit was Rs 1419 crore in Ql FY08 compared with an operating loss of Rs 1288 crore a year earlier, while income from operations expanded 9 per cent y-o-y to Rs 52862 crore in the last quarter. The company's refinery throughput was 12 million tonne in the last quarter compared with 10 million tonnes a year earlier. Of crucial r importance, is that its GRMs were $10.7 a barrel in the June 2007 quarter compared with $6.7 a year ago. Other oil marketing companies such as HPCL saw its GRM rising $9 a barrel at its Mumbai refinery in Ql FY08 compared with $8 a year ago. Meanwhile, upstream oil players provided IndianOil Rs 2,440 crore in the June quarter compared with Rs 3380.4 crore a year earlier, as part of the subsidy sharing formula relating to under-recoveries for retail sales of auto fuels, kerosene and domestic LPG. IndianOil has highlighted that its net under-recoveries was Rs 4879.49 crore in the last quarter compared with Rs 5504.16 crore a year earlier. Going forward, in sync with the global trend, IndianOil is expected to continue to enjoy strong GRMs. Also, IndianOil financial health is expected to improve, like other OMCs, once it receives the oil bonds from the central government at Rs 401, the stock trades at nearly 8 times estimated FY08 earnings.