Oil PSUs Post Combined Net Profit of Rs 30,106 Crore in Q2 Driven by Record IOC Earnings

India's three state-owned oil marketing companies (OMCs)—Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL)—reported a combined standalone net profit of Rs 30,106 crore in the July–September quarter (Q2).

The aggregate figure marks a 68.3% increase from Rs 17,884 crore recorded in the corresponding quarter of the previous financial year. It also reflects a decisive sequential rebound from a combined loss of about Rs 18,150 crore suffered in the April–June quarter (Q1). Notably, the Q2 performance accounts for approximately 39% of the three retailers' combined annual profit of Rs 77,281 crore recorded in the prior financial year.

IOC Delivers Record Performance

The surge in combined profits was primarily driven by the nation's largest refiner and fuel retailer, Indian Oil Corporation.

IOC delivered its highest-ever standalone quarterly net profit of Rs 21,630 crore, nearly tripling its profit of Rs 7,610 crore in the year-ago period and staging a major turnaround from a standalone net loss of Rs 2,661 crore in Q1. The refiner’s revenue from operations climbed to Rs 2.63 lakh crore, backed by stronger margins in its petrochemical and gas divisions as well as a brief drop in global crude procurement costs between mid-June and mid-August.

Divergent Earnings Across Peers

While IOC drove the bulk of the aggregate profit pool, its peers experienced a moderation in bottom-line figures despite strong operational gross refining margins (GRMs):

• Bharat Petroleum Corporation Ltd (BPCL): Reported a 22.5% year-on-year drop in standalone net profit to Rs 4,993 crore compared to Rs 6,443 crore a year earlier. The company posted a strong GRM of $32.53 per barrel compared to $10.78 per barrel in the year-ago period, though foreign exchange losses (Rs 397 crore) and marketing inventory losses (Rs 330 crore) trimmed gains.
• Hindustan Petroleum Corporation Ltd (HPCL): Recorded a 9% year-on-year decline in standalone net profit to Rs 3,483 crore from Rs 3,830 crore in the same period last year. HPCL’s GRM expanded sharply to $32.15 per barrel from $8.80 per barrel a year ago.

Marketing Pressures and Unpaid LPG Subsidies

The strong quarterly showing across the OMC pack was delivered despite sustained headwinds on retail fuel marketing. Pump prices for petrol and diesel remained unchanged, constraining marketing margins amid international crude volatility.

Simultaneously, under-recoveries on domestic liquefied petroleum gas (LPG) continued to build up. Standalone uncompensated LPG burdens reached Rs 32,505.69 crore for IOC, Rs 18,048.82 crore for HPCL, and Rs 17,334.40 crore for BPCL during the period. According to IOC's management, under-recoveries on domestic LPG cylinders stood at Rs 184 per cylinder in September and are projected to head higher toward the end of the calendar year.

For investors tracking state-run energy counters, the resilience in refining economics and secondary product margins continues to serve as an earnings buffer, even as the timing and quantum of government support for retail under-recoveries remain central to OMC balance sheets.