Indian Oil share rises 2% after firm logs highest ever profit

Indian Oil Corporation rose 2.5 per cent to hit a fresh 52-week high of Rs 109.90 after the company reported a record consolidated net profit of Rs 21,762.22 crore for the fiscal year 2021 against a net loss of Rs 1,876.32 crore in FY20. This is the highest annual profit ever reported by the firm.

However, the stock shed all early gains amid profit booking. At 13:08 hours, it was trading at 105.55, down 1.54 per cent on BSE.

The share of state-owned oil refining and marketing company has gained 41.5 per cent in one year and risen 15 per cent since the beginning of this year. IOCL's share stands higher than 5 day, 10 day, 20 day, 50 day, 100 day, and 200 day moving averages. Market cap of the firm rose to Rs 98,707.46 crore.

The company reported a consolidated net profit of Rs 8,781.30 crore for the quarter ended March 31. Profit in the year-ago period stood at Rs 5,185.32 crore.

For FY21, revenue from operations declined 9.6 per cent to Rs 520,236.84 crore as against Rs 575,989.70 in the fiscal year 2020.

Citi maintains a 'BUY' rating on IOCL. "IOCL's 4Q EBITDA at Rs135bn was up 40% QoQ, 16% ahead of estimates. The refining segment, boosted by much higher inventory gains, was the key driver of the beat, with petchem performance also slightly ahead of expectations; both together offset weaker marketing performance," the brokerage firm said.

"Combined with lower taxes, this drove a 25% beat at the net income level. FY21 standalone EPS stood at Rs24/sh vs. Re1/share in FY20 (the latter was dragged down by significant write-downs in 4Q). The full-year dividend was Rs12/sh (50% payout). We stay constructive on the OMCs," it added.

The company informed that other Income for the year April- March 2021 includes foreign exchange gain of Rs 1,154.42 crore (April- March 2020: Exchange Loss of Rs 3,944.60 crore included in Other Expenses). In addition to the above, Exchange Gain amounting to Rs 827.08 crore has been recognised as an adjustment to finance cost to the extent of exchange loss recognised as finance cost in earlier years.

Board of directors has recommended the final dividend of Rs 1.50 per equity share in the meeting. This is in addition to the interim dividend of Rs 10.50 per equity share paid for the year by the company.