Indian Oil profit jumps to 216.30 billion rupees in second quarter of 2026-27
Key Facts
Indian Oil's standalone net profit jumped to 216.30 billion rupees in the quarter ended Sept. 30, 2026, from 76.10 billion rupees in the year-earlier period, Reuters reported. The results cover the second quarter of the 2026-27 fiscal year, not the second quarter of calendar 2026. The increase came as the company benefited from government compensation for losses on subsidised cooking gas sales, alongside operating and financial factors cited in its disclosure and earnings call. Reuters reported that federal compensation amounted to 72.43 billion rupees for sales losses from April to September 2026. The results highlight the impact of oil price swings and crude procurement costs on earnings at India's largest refiner.
The company said in its official statement that improved profitability benefited from a temporary decline in crude prices between mid-June and mid-August, and strong margins in its petrochemicals and gas businesses. The statement did not attribute the performance to inventory valuation gains, as the initial version of the report had said. Figures from the earnings call showed that the average price of the Indian crude basket fell to 96.16 dollars per barrel in the second quarter, from 100.74 dollars in the first quarter of fiscal 2026-27. The decline provides a direct comparison between the two quarters and explains some of the conditions surrounding profitability during the period. The company also cited support from petrochemical and gas margins, without describing refining as the driver of the record result.
The improvement in profit came amid a sharp increase in operating costs. Total expenses rose 23% year on year to 2.39 trillion rupees in the quarter ended Sept. 30, Reuters reported. Raw material expenses increased by about 35% as crude procurement costs rose. The figures reflect the burden of inputs on the company's accounts during the quarter, even as the average price of the Indian crude basket fell from the first quarter. Brent averaged about 40% above its year-earlier level during the quarter, Reuters reported. The agency linked higher prices to the war with Iran and tensions related to the Russia-Ukraine war, a backdrop that highlights the difference between crude's year-on-year movement and its change between quarters.
Government compensation for cooking gas losses was one source of support Reuters highlighted in explaining revenue growth. It amounted to 72.43 billion rupees for the period from April to September 2026, while standalone net profit for the quarter rose to about three times its year-earlier level. The compensation period covers six months, while the profit figures compare one quarter with its year-earlier counterpart; the two figures therefore cover different time frames. The reported data showed that earnings cannot be viewed apart from crude costs and pricing conditions, as total expenses and raw material costs rose during the same period. The company also cited petrochemical and gas margins, alongside the temporary decline in crude prices, among the factors supporting profitability.
Looking ahead, the company's chairman said on the earnings call that Indian crude basket prices had remained above 100 dollars per barrel since September and averaged about 120 dollars in October 2026. These levels follow an average of 96.16 dollars per barrel in the second quarter, according to the chief financial officer on the call. The chairman said: "The Indian crude basket remained above 100 dollars per barrel, averaging about 120 dollars per barrel in October 2026." The company is also targeting completion of refinery expansion projects in Panipat, Barauni and Gujarat during fiscal 2026-27. The timeline puts refinery expansions among the coming operational priorities as crude prices move away from the average in the quarter when the company reported its profit surge.