Indian Oil's Q1 profit plunges 81% on lower marketing margins

BENGALURU (Reuters) - Indian Oil Corp (IOC) reported a nearly 81% plunge in first-quarter profit on Tuesday, weighed by lower marketing margins.

The state-owned firm's standalone net profit declined to 26.43 billion rupees (around $316 million) for the three months ended June 30.

IOC's average gross refining margin - the profit from making refined products from one barrel of oil - fell to $6.39 per barrel from $8.34 per barrel a year ago.

KEY CONTEXT

Fuel consumption remained strong in the quarter as robust industrial activity and general elections-related activity boosted demand in Asia's third-largest economy.

However, higher prices of crude oil - a key raw material for refiners - remained a cause for concern, with rival state-owned refiners such as Hindustan Petroleum and Bharat Petroleum reporting a hit in their bottomlines in the quarter due to lower refining margins.

India is the world's third-biggest oil importer and consumer. Indian Oil, along with its unit Chennai Petroleum, controls about a third of India's five million-barrels-per-day refining capacity.

PEER COMPARISON

Valuation (next 12 Estimates (next 12 Analysts' sentiment

months) months)

RIC PE EV/EBITDA Revenue Profit Mean No. of Stock to Div

growth (%) growth rating* analyst price yield

(%) s target** (%)

IOC 10.31 7.32 1.42 -39.79 Hold 20 1.11 6.80

Bharat Petroleum 9.94 7.38 -- -- Hold 22 1.01 6.39

Corp Ltd (BPCL)

Hindustan Petroleum 7.94 7.14 -- -- Hold 15 1.09 7.04

Corp Ltd (HPCL)

Reliance Industries 24.60 12.26 9.61 12.87 Buy 31 0.92 0.30

* The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell ** The ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading above the PT

APRIL-JUNE STOCK PERFORMANCE

-- All data from LSEG IBES

-- $1 = 83.7200 Indian rupees

(Reporting by Manvi Pant in Bengaluru; Editing by Janane Venkatraman)