Indian Oil likely to report better refining performance, marketing margins in Q1 FY26

State-run Indian Oil Corporation (IoC) on Thursday is expected to report better performance during Q1 FY26 aided by an improvement in refining performance and better marketing margins coupled with a decline in LPG under recoveries.

Analysts expect better results from India’s largest oil marketing company (OMC) in the April quarter in FY26 in line with the performance from the other two PSU OMCs — Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL).

BPCL’s consolidated net profit more than doubled to ₹6,839 crore in Q1 FY26 aided by healthy retail fuel margins and cost optimisation. Similarly, HPCL posted a multi-fold jump in its Q1 FY26 consolidated net profit at ₹4,111 crore aided by inventory gains and margin surge.

Yes Securities pointed out that the price of Brent crude for Q1 FY26 averaged $66.8 per barrel down from $8.3 quarter-on-quarter and $18.2 year-on-year.

The benchmark Singapore GRM at $5.6 per barrel was $2.5 per barrel higher than the previous quarter on an uptick in key product cracks — gasoline was up $2.6, LPG up $1.9. Jet fuel and ATF were up $1 and $0.7 per barrel, respectively.

The gross marketing margins for OMCs improved on sequential basis due to a fall in crude prices. The spot LNG prices averaged $12.4 per million British thermal units (mbtu) against $14.1 in the last quarter, it added.

The gross marketing margins for petrol and diesel averaged at ₹8.8 per litre and ₹9.7 a litre, respectively. India’s petroleum products consumption is expected improve by 2.9 per cent both y-o-y and q-o-q, the brokerage said.

In terms of refining, the Singapore GRM had a sharp rebound sequentially and Indian refiners to continue to report a premium over the benchmark on a higher share of higher cracks product—HSD, it noted.

“We expect companies to report substantial sequential improvement in core GRMs with marginal inventory and marketing adventitious losses. Overall OMCs reported performance would be stronger q-o-q despite the persistence of LPG subsidy burden which has reduced (around ₹7,800). The forex gains are also expected to quite marginal, adding to the profitability,” Yes Securities added.

More Like This

Published on August 14, 2025

_{Images are for reference only.Images and contents gathered automatic from google or 3rd party sources.All rights on the images and contents are with their legal original owners.}