Indian Oil Corporation Reports Stellar Q3 Performance with Over Four-Fold Profit Surge
Indian Oil Corporation (IOC) announced a remarkable financial performance for the third quarter of the fiscal year 2025-26, with its standalone net profit skyrocketing to ₹12,125.86 crore. This represents a more than four-fold increase compared to the ₹2,873.53 crore earned in the same period last year, as detailed in the company's stock exchange filing on Thursday.
Key Drivers Behind the Profit Growth
The substantial profit surge was primarily fueled by significant gains in refining and marketing margins, which effectively compensated for ongoing weaknesses in the petrochemicals segment. Refining margins experienced a notable boost due to lower crude oil prices, the essential raw material used by IOC to produce fuels such as petrol and diesel. During the April-December 2025 period, IOC reported earning USD 8.41 per barrel on converting crude oil into fuels, a substantial improvement from the cross-refining margin of USD 3.69 per barrel.
Additionally, fuel sales demonstrated robust growth, rising by 5 per cent in the quarter to reach 26.015 million tonnes, up from 24.78 million tonnes in the previous year. This contributed to a rise in revenue from operations, which climbed to ₹2.31 lakh crore from ₹2.16 lakh crore in Q3 of the 2024-25 fiscal year.
Financial Highlights and Segment Performance
The company's pre-tax earnings from fuel sales witnessed an impressive jump, increasing four times to ₹16,836.08 crore. The gas business also showed positive momentum, with income rising by 34 per cent to ₹596.45 crore. However, the petrochemical business continued to face challenges, with losses more than doubling to ₹361.51 crore.
For the first nine months of the current fiscal year, IOC's net profit surged to ₹25,424.91 crore, a significant increase from ₹5,696.72 crore in the April-December 2024 period. Revenue from operations for the nine months ended December 31, 2025, rose to ₹6.53 lakh crore from ₹6.27 lakh crore a year earlier.
Subsidy Receipts and Government Compensation
IOC accounted for ₹2,414.34 crore in subsidy receipts related to domestic cooking gas sales, which are sold at government-controlled rates. This follows the government's approval in October last year of a one-time compensation to cover losses incurred by IOC and other state-owned fuel retailers from selling LPG below market prices.
The approved subsidy for IOC amounts to ₹14,486 crore, to be paid in 12 equal monthly instalments starting from November 2025. In accordance with this arrangement, the company has recognized ₹2,414.34 crore instalments for November and December 2025 as revenue from operations, though it did not confirm whether the subsidy has been physically received.
Market Context and Retail Price Dynamics
IOC, along with other state-owned fuel retailers such as Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL), has maintained a freeze on retail petrol and diesel prices since May 2022, with the exception of a pre-election rate cut of ₹2 per litre in March 2024. This pricing strategy has persisted despite softening crude oil prices, contributing to bumper profits for these companies.
Domestic fuel sales for the nine-month period showed a 4.3 per cent increase, while petrochemical sales volume rose by 3 per cent to 2.411 million tonnes.
The overall financial performance underscores IOC's resilience and strategic positioning in the energy market, driven by favorable refining conditions and steady demand growth.
