Indian Oil Corp: Improvement in GRM drives profitablity
News: IOC's revenue increased 9.5% QoQ to Rs.169770.8 crore while marketing sales were up 1% QoQ to 18.9 MMT in Q2FY22. Crude throughput fell 8.6% QoQ to 15.3 MMT and GRM was US$ 6.6/bbl supported by inventory gain of US$ 1.8/bbl. EBITDA stood at Rs.10628.1 crore, down 4.5% QoQ leading to PAT of Rs.6360.1 crore, up 7% QoQ.
Views: IOC results were better than estimate as GRM exceeded expectations. With recovery in product cracks in current quarter, sustained GRM at higher level will be key monitorable. Further marketing sales growth with stable marketing margins will be important going ahead.