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India’s largest oil marketing company, Indian Oil Corporation returned to profit in the first quarter of fiscal 2014-15 on the back a forex gain as compared to a loss last year and lower interest expenditure. During the quarter, the company’s net profit stood at INR 2,522.94 crore as against a loss of INR 3,093 crore in the same quarter last year.

The company’s Chairman B Ashok said the return to profit was primarily due to a foreign exchange gain of INR 128 crore as against a loss of over INR 4,000 crore last year, write-back of trust receivables of INR 343 crore as against a provisioning of INR 273 crore last year and INR 556 crore saving on interest expenses due to lower borrowing.

“As on 30.06.2014 our borrowing level was INR 68,953 crore as against INR 86,263 crore on 31.03.2014. Our borrowing came down due to a drop in the underrecovery of high speed diesel,” said Ashok, here on Tuesday.

During the quarter, the company’s net sales grew by 13.1 per cent to INR 1,22,754.89 crore as against INR 1,13,018.13 crore in the same quarter last year. After the latest round of price hikes on August 1, which took the retail price of diesel to INR 58.40 a litre in Delhi, under-recovery on the product came down to INR 1.33 a litre. Meanwhile, Ashok added that the company plans to start the crude unit at the Paradip refinery by December. He also said it is too early to comment on a partnership with Adani for a refinery on the West Coast as no plans have been finalised yet.

Source-On Request