Indian Oil shares tank 4.5% following disappointing Q3 results
What's the story
Shares of Indian Oil Corporation Ltd. (IOC), India's largest state-run oil refiner, plunged 4.5% in today's market session. The stock's fall came after the company reported disappointing December quarter results, missing analyst estimates. The revenue for the quarter stood at ₹1.94 lakh crore, marginally exceeding a CNBC-TV18 poll estimate of ₹1.92 lakh crore.
Financial performance
Indian Oil's net profit and EBITDA disappoint
Indian Oil's net profit for the December quarter was a disappointing ₹2,874 crore, much lower than the CNBC-TV18 poll expectation of ₹6,140 crore. The number includes a one-time gain of ₹680 crore. The company's Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) also fell short at ₹7,116 crore — nearly 50% below the anticipated figure of around ₹13,078 crore.
Market impact
EBITDA margin and GRMs underperform market predictions
The EBITDA margin for the quarter stood at 3.7%, much lower than the expected 6.8%. Meanwhile, Indian Oil's Gross Refining Margins (GRMs) for the quarter stood at $3.69 per barrel, lower than market expectations which had pegged them at $6.2 per barrel. These disappointing numbers only added to the fall in share value.
Stock status
LPG under-recoveries and stock performance
Indian Oil also reported LPG under-recoveries of ₹14,325 crore in the quarter. At the of writing, the company's shares were trading 3.1% lower at ₹124.8. This marks a steep 37% drop from its recent peak price of ₹196, further emphasizing the effect of the disappointing Q3 results on investor sentiment and market performance for Indian Oil.