IOCL Q4 Results Preview: How Weaker Margins and Crude Oil Volatility Could Impact Profitability

Indian Oil Corporation Limited Set to Release Q4 Earnings: What to Expect

As Indian Oil Corporation Ltd (IOCL) prepares to unveil its fourth-quarter financial results for FY25 on April 30, anticipation among analysts is building. Expectations point towards a lackluster performance, primarily driven by diminished marketing margins, under-recoveries in the liquefied petroleum gas (LPG) sector, and tightening refining spreads.

Earnings Forecast: A Mixed Bag

According to Nuvama Institutional Equities, IOCL’s EBITDA is projected to experience a significant drop of 42% year-on-year, though a sequential growth of 69% is anticipated, thanks to some seasonal enhancements. The primary reason for this downturn is the struggling refining division, which has seen the benchmark Singapore Gross Refining Margins (GRMs) plummet by 58% YoY due to a decrease in global product cracks.

Refining throughput is expected to decline by 2% YoY and 1% QoQ.
Retail fuel margins, despite showing robust annual growth, have dipped quarter-on-quarter due to fluctuations in crude prices and a weakening rupee.

Nuvama estimates that diesel retail margins will stand at ₹6/litre (showing a yearly increase of 58%, but a quarterly decline of 29%), while petrol margins are expected to reach ₹10/litre (+40% YoY, -21% QoQ). Domestic retail sales are projected to grow by 4% YoY in the March quarter.

Challenges in the Petrochemical Segment

The petrochemical sector is also likely to face challenges with subdued realizations and narrow spreads. YES Securities forecasts IOCL’s core and reported GRM to be around $5.3 and $5.7 per barrel, respectively, with refining and marketing throughput estimated at 18.2 million and 25.3 million metric tons.

Blended gross marketing margins are anticipated to be ₹4.4/litre.
The core integrated EBITDA margin is expected to decline to $2.4 per barrel, down from $2.3 YoY and $2.8 QoQ.

Broader Market Trends

ICICI Securities notes that the performance of oil marketing companies (OMCs) in Q4FY25 will likely be impacted by weaker marketing margins and under-recovery in LPG. During this quarter, Singapore GRMs decreased by $1.7/bbl QoQ, with marketing margins slipping to ₹8.5 for petrol and ₹5.5 for diesel, which has contributed to overall earnings weakness.

Despite these challenges, analysts suggest that retail volumes and some margin recovery may provide support. However, the combination of elevated input costs and global softness in refining could continue to suppress profitability.

Stock Performance: A Recent Upsurge

In April, Indian Oil Corporation has seen its share price rise for the second month in a row, gaining 6.26% thus far, following a notable 12.51% increase in March. This surge comes after a prolonged decline between October 2024 and February 2025, during which the stock experienced a dramatic 37.22% loss in value.

As IOCL prepares to announce its earnings, stakeholders will be keenly observing how these financial results reflect the company’s resilience amidst industry-wide challenges.