Indian Oil Corporation reported a 30.9% increase in its net profit for the first quarter of fiscal 2016-17 at ?8,628.98 crore against ?6,590.83 crore in Q1/2015-16. The jump in profit was due to substantial inventory gain and improvement in margins from the petrochemical business. However, during the quarter, the company's net revenue fell 5.75% to ?1,07,200.65 crore against ?1,13,743.46 crore in Q1/2015-16.
The company's board also recommended the issue of bonus shares in the ratio of 1:1. The bonus shares will help in the capitalisation of reserves to the tune of ?2,427 crore, said Sanjiv Singh, Director-Refineries, IndianOil. An oil marketing company gets an inventory gain when crude oil prices start firming up. This is because companies would have sourced the crude oil at lower prices and by the time it reaches the refinery for processing and selling products, the prices would have improved. IndianOil benefitted significantly as its inventory gain during the quarter under review stood at ?7,479 crore against ?3,223 crore in the same quarter last year.