Why falling crude costs lifted IOC

Indian Oil Corporation delivered a comeback quarter, its shares climbed after Q3 profits and revenue jumped from the previous quarter.

By the numbers:

Net profit: up 59.3% QoQ at ₹12,126 cr vs ₹7,610.5 cr 

Revenue: up 14.3% QoQ at ₹2.04 lk cr vs ₹1.78 lk cr

What helped: oil got cheaper, and people used more fuel.

Crude oil is the main raw material for refiners like IOC, and Brent crude prices fell over 9% in the October-December quarter. When crude becomes cheaper, companies like IOC often make better profits on every litre they sell.

At the same time, demand stayed strong. India’s fuel use hit a record high in December after already rising in November. 

Government data from Petroleum Planning and Analysis Cell (PPAC) showed fuel consumption grew 5.5% in November and 5.3% in December compared to last year, after a small dip in October.

So basically, cheaper crude and stronger fuel demand powered a strong quarter for IOC, and the stock cheered.