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Indian Oil Corporation Ltd. (IOCL), a leading oil and gas company in India, experienced a significant decline in its first-quarter net profit for the fiscal year 2024. The company reported a sharp 81% drop to ₹2,643 crore, compared to ₹13,750 crore in the same period last year. This substantial decrease highlights the challenges faced by the energy sector, influenced by factors such as global market volatility and fluctuating oil prices.
The decline in net profit was accompanied by a modest decrease in revenue. IOCL's revenue for the period ended June 30, 2024, stood at ₹2,15,989 crore, reflecting a 2.33% decline compared to the ₹2,21,145 crore recorded in the corresponding period of the previous year. This slight dip in revenue indicates a slowdown in overall business activity, potentially due to a combination of factors, including economic conditions and changes in consumer demand.
A key indicator of refining performance, the average Gross Refining Margin (GRM) for the period between April and June 2024, came in at $6.39 per barrel. This represents a decrease from the $8.34 per barrel recorded in the same period of the previous year. The decline in GRM suggests that IOCL faced lower margins on its refining operations, likely influenced by fluctuating crude oil prices and global market dynamics.
The company further clarified that its core GRM, after accounting for inventory gains and losses, stood at $2.84 per barrel for the April-June 2024 period. This indicates that while the average GRM was lower, the core GRM provides a more refined picture of the company's refining performance, taking into account the impact of inventory fluctuations.