Inventory loss, fall in GRMs, forex loss and dip in prices led to IOC posting a 83% (YoY) drop in net profit at Rs.564 crore for Q2FY20
Inventory loss happens when the company sells fuel at a price much lesser than the price at which it purchased the crude oil. IOC recorded an inventory loss of Rs.1807 crore v/s an inventory gain of Rs.2,895 crore in previous Q2. Turnover slipped to Rs. 1, 32, 376 crore, down 13% due to dip in prices.
Forex loss for the quarter was at Rs 1,135 crore.
GRM was at $1.28 v/s $6.79 per barrel in Q2 of previous fiscal. Without accounting for inventory losses, the GRM was $3.99 per barrel.
The market is very disappointed and the stock figures among the top five losers on the BSE since opening bell. The stock opened 4% lower at Rs.141, going down to an intraday low at Rs.140.30, a drop of 4.5%. Its 10% LC for today is at Rs.132.15.