IOC Q4 net beats analyst estimates on high susbsidy

State-owned Indian Oil Corporation's fourth quarter numbers beat analyst estimates, mainly on subsidy payment from the government.

Increased subsidy of Rs 53,278.07 crore from the  government to defray the cost of selling fuel below cost pitched in to boost the company into the black. The company's books were strengthened with a Rs 31,966.84  crore from upstream firms such as ONGC to make up for the cost of selling diesel and cooking fuel at below market price.

Sales grew 11 percent to Rs 1.28 lakh crore from Rs 1.15 lakh crore in the December quarter. Analysts on an  average had expected the company to report a net profit of Rs 13600 crore on revenues of  Rs 1.24 lakh crore. Other income was up 14 percent to Rs 1,093 crore from Rs 956 crore in third quarter.

However, finance cost has reduced from Rs 1,672 crore to  Rs 1,376 crore. IOC also paid tax of Rs 642 crore  in fourth quarter. EPS or earnings per share for the  fourth quarter was Rs 59.77.

IOC sells diesel, cooking gas (LPG) and kerosene at government-controlled rates which are way below the  cost. Part of the losses incurred in the process are reimbursed by way of cash subsidy from the government.
The government did not pay any cash subsidy in the third quarter and released lumpsum in the quarter under review.

Despite the government subsidy and upstream support, the company booked Rs 548.49 crore loss on the sale of fuel in the fiscal. The company posted a net profit after tax of Rs 4449 crore for the year ended  March 31, 2013 as compared to Rs 4225.98 crore last year. Total Income has increased from Rs 412111.16 crore  to Rs. 465291.3 crore in the same period.

The board has recommended a dividend of Rs 6.2 per equity share.  The stock closed at Rs 294.80, up Rs 3 or 1  percent.

(With inputs from agencies)