IOC Q3 Profit Jumps 322% to ₹12,126 Crore on Strong Margins

Introduction

Indian Oil Corporation Limited (IOCL), India's largest state-run oil marketing company, announced a remarkable financial performance for the third quarter of fiscal year 2026. The company reported a standalone net profit of ₹12,126 crore for the quarter ending December 31, 2025. This represents a staggering 322% year-on-year increase from the ₹2,874 crore profit recorded in the same period of the previous fiscal year. The substantial growth was primarily fueled by a significant improvement in refining margins, robust operational efficiency, and resilient domestic fuel demand.

Q3 Financial Highlights

The Maharatna PSU's revenue from operations for the December quarter rose by 7% year-on-year to ₹2,31,769 crore, compared to ₹2,16,000 crore in Q3 FY25. The performance also showed strong sequential growth, with net profit increasing by 59.3% from the preceding quarter's ₹7,610.5 crore. Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) climbed 42.8% sequentially to ₹20,824.8 crore, leading to an EBITDA margin expansion of 200 basis points to 10.2%. The basic Earnings Per Share (EPS) for the quarter stood at ₹8.81.

The Refining Margin Advantage

A key driver behind the surge in profitability was the sharp improvement in Gross Refining Margins (GRM). For the nine-month period from April to December 2025, the average GRM stood at $1.41 per barrel, a significant increase from the $1.69 per barrel recorded in the corresponding period of the previous year. The core GRM, which excludes inventory gains or losses, was even higher at $1.86 per barrel. This improvement was supported by relatively stable international crude oil prices and a decline of over 9% in Brent crude prices during the quarter, which helped lower input costs for the refiner.

Robust Operational Performance

IOCL's operational metrics demonstrated strong efficiency and growth. Domestic product sales for the quarter grew by 13.85% to 26.015 million metric tonnes (MMT), indicating sustained fuel consumption across retail and industrial sectors. The company's refinery throughput increased by 10.32% to 19.427 MMT, while pipeline throughput saw a 14.40% rise to 27.557 MMT. These figures highlight the company's ability to optimize its vast infrastructure to meet growing energy demands.

Segment-Wise Revenue Breakdown

The petroleum products segment continued to be the primary contributor to IOCL's revenue, generating ₹2,17,890 crore in Q3 FY26. This segment also delivered a profit before tax and finance costs of ₹16,836 crore. The gas segment reported revenues of ₹11,691 crore, while the petrochemicals business contributed ₹6,936 crore to the topline, showcasing a diversified revenue stream.

Government Support and Nine-Month Performance

The company's earnings were also supported by government compensation for LPG under-recoveries. In Q3, IOCL recognized ₹2,414.34 crore as part of a larger approved compensation package. For the first nine months of FY26, the company's cumulative performance was equally strong, with a net profit of ₹25,425 crore on revenues of ₹6,53,369 crore, marking a 346% year-on-year profit growth.

Balance Sheet and Financial Health

IOCL maintained a healthy financial position during the quarter. As of December 31, 2025, the standalone debt-to-equity ratio stood at a comfortable 0.60. The company's net worth was reported at ₹1,92,621 crore, and the Interest Service Coverage Ratio was a robust 9.63 times, indicating strong debt-servicing capabilities.

Market Reaction and Stock Performance

The strong quarterly results were well-received by the market. Following the announcement on February 5, 2026, shares of Indian Oil Corporation traded 2% higher, closing at ₹176.25. The stock has been a strong performer over the past year, delivering returns of approximately 40% to its investors, reflecting positive sentiment around the company's turnaround and improved profitability.

Conclusion

Indian Oil Corporation's Q3 FY26 results underscore a significant turnaround from the previous year, driven by a favorable margin environment and strong operational execution. The impressive growth in profit and revenue highlights the company's resilience and its critical role in India's energy sector. With domestic fuel demand expected to remain strong and a stable outlook on refining margins, IOCL is well-positioned to continue its growth trajectory.