IOC’s operating margin rebounds to 13.31% after Q1 collapse
Expenses fell 16.08% QoQ against a 4.67% revenue decline, while YoY margin improved 4.22 percentage points; results were filed after close.
Filed 30 Oct 2026, 15:58 IST · after market close · Indian Oil Corporation Ltd (IOC)
Key takeaways
- IOC’s consolidated operating margin rebounded 11.79 percentage points QoQ to 13.31% as expenses fell 16.08% against a 4.67% revenue decline.
- Net profit recovered to Rs 22,502.62 cr from a Rs -1,141.09 cr loss in Q1FY27, despite interest costs rising 44.51% QoQ.
- Revenue rose 42.18% YoY while expenses grew 35.59%, lifting operating margin 4.22 percentage points, though the 6.05-point tax-rate decline also aided profit growth.
Price around the results
Operating recovery reverses Q1 weakness
IOC reported consolidated revenue of Rs 253,966.89 cr and net profit of Rs 22,502.62 cr for Q2FY27, reversing the loss recorded in Q1FY27. The QoQ recovery was driven by operating profit returning to Rs 33,797.49 cr from Rs 4,062.01 cr, even as revenue declined 4.67%. Interest costs rose 44.51% QoQ, limiting the recovery below the operating line.
Lower costs drove the margin rebound
Expenses fell 16.08% QoQ, much faster than the 4.67% revenue decline, lifting operating margin by 11.79 percentage points to 13.31%. On a YoY basis, revenue grew 42.18% while expenses grew 35.59%, resulting in a 4.22-point margin improvement. Other income contributed 4.69% of pre-tax profit, so it was not the main source of the quarter’s earnings.
Margin now exceeds its pre-Q1 trajectory but trails peers
Operating margin had risen from 6.90% in Q1FY26 to 11.91% in Q4FY26 before dropping to 1.52% in Q1FY27; Q2FY27 marked a sharp rebound to 13.31%. The lower YoY tax rate, down 6.05 percentage points to 20.18%, also flattered net profit growth. IOC’s margin was 1.52 percentage points below the 14.83% median for 17 Energy peers that had reported, placing it eighth from the bottom.
No market reaction yet after the late filing
The results were filed after market close, so there is no current-session stock reaction to assess. Across the eight prior result reactions, IOC rose four times and fell four times, with a median absolute move of 1.97%.
Q2FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹2,53,967 cr | ₹2,66,407 cr | -4.67% | +42.18% |
| Other income | ₹1,322 cr | ₹1,143 cr | +15.66% | -2.47% |
| Expenses | ₹2,20,169 cr | ₹2,62,345 cr | -16.08% | +35.59% |
| Operating profit | ₹33,797 cr | ₹4,062 cr | +732.04% | +108.05% |
| Operating margin (%) | 13.31% | 1.52% | — | — |
| Interest | ₹2,499 cr | ₹1,730 cr | +44.51% | +10.12% |
| Depreciation | ₹4,430 cr | ₹4,408 cr | +0.49% | +4.79% |
| Profit before tax | ₹28,191 cr | ₹-933 cr | — | +153.88% |
| Tax | ₹5,688 cr | ₹209 cr | +2628.01% | +95.27% |
| Net profit | ₹22,503 cr | ₹-1,141 cr | — | +174.73% |
| EPS (₹) | ₹15.54 | ₹-1.18 | — | +173.59% |
Operating margin of 13.31% compares with a Energy sector median of 14.83% across 17 peers that have reported Q2FY27.
What to watch
- Whether operating margin holds above 13.31% after the Q2FY27 rebound.
- Whether expenses continue to grow more slowly than revenue, as they did YoY at 35.59% versus 42.18%.
- Whether interest costs moderate from the 44.51% QoQ increase.