Indian Oil Corporation Limited: Annual Performance Review for FY 2024–25

Indian Oil Corporation Limited (IOCL), India’s largest public sector oil refining and marketing company, has announced its audited financial results for the year ended 31 March 2025. The results reflect a year of operational resilience amid volatile global crude prices, lower refining margins, and ongoing challenges in the domestic and international energy markets.

This detailed review examines IOCL’s financial performance on both standalone and consolidated bases, its operational highlights, and strategic developments during the year.

1. Revenue and Income Performance

On a standalone basis, IOCL reported Revenue from Operations of ₹8,45,512.61 crore in FY 2024–25. This was supported by Other Income of ₹4,963.84 crore, taking the Total Income to ₹8,50,476.45 crore. While revenue remained strong, it was impacted by lower product prices in some quarters due to global oil price adjustments and foreign exchange fluctuations.

On a consolidated level, Revenue from Operations stood higher at ₹8,62,876.46 crore, reflecting contributions from subsidiaries, joint ventures, and associates. Total Income at the group level was ₹8,67,968.08 crore, demonstrating IOCL’s extensive integration across the petroleum value chain.

2. Profitability Analysis

Despite a challenging refining environment, IOCL maintained profitability.

Standalone Performance

  • Profit Before Exceptional Items & Tax: ₹14,044.32 crore
  • Exceptional Items: A gain of ₹1,838.02 crore, largely due to the reversal of provisions related to the Gujarat VAT Input Tax Credit dispute following favorable judicial orders.
  • Profit Before Tax: ₹15,882.34 crore
  • Tax Expense: ₹2,920.77 crore
  • Net Profit: ₹12,961.57 crore

After accounting for Other Comprehensive Income (negative ₹1,359.41 crore), the Total Comprehensive Income stood at ₹11,602.16 crore. Earnings per Share (EPS) came in at ₹9.41.

Consolidated Performance

  • Profit Before Exceptional Items & Tax: ₹15,225.43 crore
  • Exceptional Items: ₹1,838.02 crore gain, same as standalone.
  • Profit Before Tax: ₹17,063.45 crore
  • Net Profit: ₹13,788.83 crore
  • Net Profit Attributable to Equity Holders: ₹13,507.84 crore
  • Total Comprehensive Income (Equity Holders): ₹12,735.92 crore
  • EPS: ₹9.87

3. Operational Metrics

IOCL operates across multiple segments including Petroleum Products, Petrochemicals, Gas, and other energy businesses.

Segment Revenue (FY 2024–25, Standalone):

  • Petroleum Products: ₹7,93,370.63 crore
  • Petrochemicals: ₹28,030.50 crore
  • Gas: ₹42,341.44 crore
  • Other Business Activities: ₹1,747.14 crore

While petroleum products continue to dominate revenue, the Gas segment posted strong year-on-year growth, reflecting India’s push towards cleaner fuels.

4. Refining Margins and Global Market Context

The company reported an Average Gross Refining Margin (GRM) of $4.80 per barrel for FY 2024–25, a steep decline from $12.05 per barrel in the previous year. The Core GRM, after adjusting for inventory gains/losses, stood at $4.53 per barrel. This decline reflects the normalization of refining spreads after the exceptional margins of FY 2023–24, as well as fluctuating crude oil benchmarks and product cracks.

5. Balance Sheet Strength

Standalone:

  • Total Assets: ₹4,80,000.34 crore
  • Equity: ₹1,78,676.86 crore
  • Non-current Liabilities: ₹82,055.82 crore
  • Current Liabilities: ₹2,19,267.66 crore

Consolidated:

  • Total Assets: ₹5,06,867.05 crore
  • Equity: ₹1,91,024.66 crore (including ₹4,537.34 crore of non-controlling interest)
  • Non-current Liabilities: ₹85,227.98 crore
  • Current Liabilities: ₹2,30,614.41 crore

IOCL maintains a balanced capital structure, with a debt-equity ratio of 0.75 on a standalone basis, indicating moderate leverage for a capital-intensive industry.

6. Cash Flow Highlights

On a standalone basis, IOCL generated Net Cash Flow from Operations of ₹33,170.46 crore. This strong operational cash generation was partially offset by substantial capital expenditure, including ₹29,095.35 crore towards construction work-in-progress and ₹4,398.93 crore towards property, plant, and equipment purchases.

The company maintained disciplined financing activities, raising ₹25,451.21 crore in long-term borrowings while also repaying ₹21,668.40 crore.

7. Dividend Announcement

The Board of Directors recommended a final dividend of ₹3.00 per share (30% of face value), subject to shareholder approval. This is consistent with IOCL’s policy of rewarding shareholders while retaining sufficient earnings for future growth investments.

8. Key Regulatory and Legal Developments

  • LPG Subsidy Buffer: IOCL maintains a separate account for LPG pricing differentials as per the Ministry of Petroleum and Natural Gas (MoPNG) directive. As of 31 March 2025, this account showed a net negative buffer of ₹19,926 crore, which has not been recognized as revenue.
  • Defence Supplies Pricing Dispute: Deductions totaling ₹690.03 crore by the Principal Controller of Defence Accounts and the Indian Air Force are under contestation. The matter is still under deliberation.
  • Gujarat VAT Case: IOCL received favorable orders from the Supreme Court and the Gujarat VAT Tribunal, resulting in the reversal of earlier provisions worth ₹1,838.02 crore.
  • Retired Officers Pension Scheme Case: The Delhi High Court has directed re-fixation of pensions under a Defined Benefit Scheme. IOCL is appealing the decision, confident of avoiding liability.

9. Strategic and Segmental Overview

IOCL’s integrated business model remains its strength. The Petroleum Products segment, which includes refining and marketing of fuels, remains the mainstay. The Petrochemicals segment continues to be a strategic growth area, with investments in new polymer units and feedstock optimization.

The Gas business has gained prominence with rising LNG imports, city gas distribution initiatives, and participation in LNG terminal operations.

The Other Business Activities segment covers exploration & production, renewable energy, and specialty products, aligning IOCL with the global energy transition.

10. Challenges and Risks

The drop in GRM highlights IOCL’s exposure to global refining cycles. Other risks include:

  • Crude Oil Price Volatility – affects both input costs and selling prices.
  • Foreign Exchange Fluctuations – impacts import costs and dollar-denominated debt.
  • Regulatory Changes – especially in fuel pricing and environmental norms.
  • Energy Transition Pressures – global push towards renewables poses long-term challenges for fossil-fuel-based businesses.

11. Outlook for FY 2025–26

IOCL is expected to continue its focus on capacity expansion, diversification, and cleaner fuel technologies. Key priorities include:

  • Expanding refining capacity to meet future demand.
  • Scaling up petrochemical integration for higher margins.
  • Growing the gas and renewables portfolio.
  • Implementing digital transformation for operational efficiency.

With India’s energy demand projected to grow steadily, IOCL remains well-positioned, although global uncertainties will continue to influence performance.

Conclusion

FY 2024–25 was a year of mixed outcomes for Indian Oil Corporation Limited. While revenue remained robust and the company sustained profitability despite lower refining margins, global market volatility and domestic pricing constraints influenced results. Strong operational cash flows, prudent capital management, and a focus on diversification are likely to keep IOCL resilient in the face of challenges.

As the company moves forward, its integrated business model, government backing, and strategic investments in both traditional and alternative energy are expected to reinforce its leadership in India’s energy sector. The FY 2024–25 performance underscores IOCL’s adaptability, financial strength, and commitment to delivering value to stakeholders.

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