Indian Oil Q4 FY26: record volumes, strong profits, and a volatile setup for FY27

Indian Oil Corporation Limited closed FY 2025-26 with record operational performance and a sharp jump in profitability. On a standalone basis, revenue from operations rose to Rs 8,86,224 crore for the year, while profit after tax increased to Rs 36,802 crore. Q4 standalone profit after tax stood at Rs 11,378 crore.

Management framed the quarter against a rapidly changing global backdrop. The earnings call repeatedly returned to Middle East disruptions and their impact on crude, LPG, and natural gas supply chains. The company said it worked closely with the Government of India to ensure uninterrupted fuel availability by diversifying sourcing, optimizing crude procurement, and ramping up domestic LPG production.

The operational story, however, was largely positive. FY 2025-26 was described as a landmark year across refining, pipelines, and marketing. Refinery throughput reached 75.5 MMT, pipeline throughput touched 105.6 MMT, and total sales volume hit 105.117 MMT, all stated as highest ever.

Financial performance: profitability rebounded strongly

The company reported a stable revenue base with a significant profit rebound versus FY 2024-25.

Management attributed the sequential revenue increase to improved sales volumes. The call also highlighted that the profitability for FY 2025-26 was largely insulated from late-February volatility due to inventories procured at normal prices before the conflict.

At the same time, management acknowledged the impact of currency moves on costs. The management team said the Indian rupee depreciated around 11% during the year and pointed to exchange losses as a major driver behind higher other expenses.

Operational performance: record throughput and sales

Indian Oil reported record volumes across multiple verticals.

Refineries delivered the highest-ever annual crude throughput of 75.5 MMT with capacity utilization of 107.4%. Q4 throughput was 19.7 MMT and utilization was 113.9%. Distillate yield for the year was shared at 79.7%.

Pipelines also reported a record year, with throughput of 105.6 MMT and capacity utilization of 73.7%. Marketing recorded the highest-ever sales volume of 105.117 MMT, with inland petroleum product sales and exports together forming the base, and additional contributions from gas and petrochemicals.

Retail expansion continued at scale. Management said 2,597 retail outlets were commissioned during FY 2025-26, taking the total network to 42,818. A record 909 outlets were commissioned on National Highways, described as supportive for market share.

Lubes and petrochemicals also posted record volume numbers. Lube sales were reported at 905 TMT for the year, up about 16% per the investor presentation, while petrochemical sales reached 3.4 MMT. Gas sales were stated at 7.3 MMT.

Segment picture: petroleum dominates revenue, gas profitability is under pressure

The audited standalone segment table provides a revenue breakdown by segment for FY 2025-26.

Within segment results, petrochemicals improved in Q4, with management stating that the fourth quarter was very good for petrochemicals and margins improved. Gas, however, remained volatile. Management noted elevated gas prices impacting both volumes and margins, and stated that pricing rather than availability was the key constraint.

In the Q and A, management also stated that the city gas distribution business turned EBITDA positive in Q1 FY 2025-26 and became PBT positive by the end of FY 2025-26, positioning it as a net positive contributor going forward.

Capex and project execution: a heavy 2026 commissioning calendar

Indian Oil’s capex program remains centered on large refining and petrochemical expansions, supported by pipeline projects and emerging energy investments.

The investor presentation listed major project progress as on 31.03.2026. Panipat refinery expansion from 15 MMTPA to 25 MMTPA was at 92.8% physical progress with expected commissioning in Dec 2026, with progressive start mentioned from Jun 2026. Gujarat refinery expansion from 13.7 MMTPA to 18 MMTPA was at 87.8% progress with expected commissioning in Nov 2026 and progressive start from Jul 2025. Barauni refinery expansion from 6 MMTPA to 9 MMTPA was at 90.5% progress with expected commissioning in Aug 2026.

On the petrochemical side, the PX-PTA complex at Paradip was at 93.5% progress and expected to be commissioned in Aug 2026.

Capex incurred during FY 2025-26 was shown at Rs 32,405 crore, with the next-year capex target stated at Rs 32,700 crore. In the call, management said the broad allocation would be mainly refining and existing pipeline setup, and also mentioned around Rs 5,000 crore for renewables.

Management clarified a typical commissioning ramp-up profile, stating that the company generally expects about 60% capacity in the first year, 80% in the second year, and 100% in the third year after commissioning.

Risk and volatility: LPG under-recoveries, forex, and geopolitical disruption

The call repeatedly returned to the current environment and the need to balance energy security with business viability.

LPG economics were a major discussion point. Management said under-recovery per cylinder was around Rs 100 in Q4 FY 2025-26, which rose to Rs 171 in April 2026 and further increased to Rs 670 in May 2026. Management also stated LPG loss incurred during Q4 FY 2025-26 was Rs 2,405 crore and full-year LPG loss was Rs 9,211 crore, stated as without registering any subsidy received by the company.

The audited standalone notes disclosed that the company had a cumulative net negative LPG buffer of Rs 23,101.56 crore as on 31.03.2026. The same notes also described a government-approved compensation of Rs 14,486 crore, with Rs 6,035.85 crore recognized as revenue from operations for the period Nov 2025 to Mar 2026.

Geopolitical risk was also explicitly referenced in audited disclosures. Inventories included three crude oil shipments valued at Rs 5,411.83 crore and five LPG shipments valued at Rs 3,618.64 crore waiting in the Arab Gulf or Persian Gulf region as on 31.03.2026. These shipments were stated as adequately covered through insurance, and all five LPG shipments had been received as on 18.05.2026.

On reporting metrics, management said it was pausing disclosure of refining margins in the near term due to unusual volatility and the fact that high GRMs may not reflect overall profitability in a period where marketing can be squeezed.

Governance and financial reporting notes

The auditors noted that the company did not have the minimum number of Independent Directors required under the Companies Act and SEBI listing regulations during the reporting year. The report also stated that due to non-availability of any Independent Director with effect from 28.03.2026, the Audit Committee, the Nomination and Remuneration Committee, and the CSR Committee were discontinued and had not been reconstituted till the reporting date.

The standalone notes also disclosed impairments recognized during the quarter: an impairment loss of Rs 1,212.42 crore against non-fossil or off-gas based fuel production facilities recognized as independent CGUs, and an impairment loss of Rs 1,219.57 crore against the investment in IndOil Global B.V. based on an independent valuation.

Closing takeaways

FY 2025-26 delivered a strong recovery in profits and record operational performance for Indian Oil. The company enters FY 2026-27 with large brownfield expansions nearing commissioning and a capex plan broadly maintained at about Rs 32,700 crore.

The near-term investor question is less about demand and more about volatility: LPG under-recoveries, currency moves, and geopolitical disruptions can quickly reshape quarterly profitability even when volumes stay high. Management’s focus, as communicated in the call, remains on supply continuity, completing major projects during 2026, and building a longer-term transition platform through renewables and green hydrogen.