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Our Infrastructure Bureau
New Delhi, July 28: The state-run behemoth Indian Oil Corporation Ltd (IOC) has posted a 105 per cent jump in its net profit and a 21 per cent increase in gross turnover in the first quarter of the fiscal. The oil refining and marketing mega corporation earned a net profit of Rs 590 crore in the first three months of the year compared to Rs 287 crore in the first quarter of the 1997-98 fiscal.
Between April and June, Indian Oil's gross sales touched Rs 17,134.89 crore, compared with Rs 14,104.64 crore it had posted in the first quarter of last year. According to a company release, the national oil company was on the verge of embarking on new projects, worth Rs 5,000 crore, such as diesel hydro-desulphurisation units at its Haldia, Gujarat and Mathura refineries and the expansion of its Panipat refinery. The centre has also approved Indian Oil's proposal to set up a 9-million-tonne grassroots refinery at Paradip in Orissa.
Insight
Better cash flows boost bottomline
The effect of partial New Delhi, July 28: The state-run behemoth Indian Oil Corporation Ltd (IOC) has posted a 105 per cent jump in its net profit and a 21 per cent increase in gross turnover in the first quarter of the fiscal. The oil refining and marketing mega corporation earned a net profit of Rs 590 crore in the first three months of the year compared to Rs 287 crore in the first quarter of the 1997-98 fiscal.
Between April and June, Indian Oil's gross sales touched Rs 17,134.89 crore, compared with Rs 14,104.64 crore it had posted in the first quarter of last year. According to a company release, the national oil company was on the verge of embarking on new projects, worth Rs 5,000 crore, such as diesel hydro-desulphurisation units at its Haldia, Gujarat and Mathura refineries and the expansion of its Panipat refinery. The centre has also approved Indian Oil's proposal to set up a 9-million-tonne grassroots refinery at Paradip in Orissa.
Insight
Better cash flows boost bottomline
The effect of partialdecontrol is clearly visible in IOC's results. Though turnover has increased by only 21 per cent, bottomline has shown a tremendous growth rate of 105 per cent. The main reason for the improvement in the bottomline seems to be better cash flows as a result of removing five products from the administered pricing mechanism, which has negated the increase in crude oil price payable to the Oil & Natural Gas Corporation (ONGC). Furthermore, increase in prices of petrol and liquefied petroleum gas (LPG) and linking diesel (which is one of the major products) with international prices has helped the company in improving its operating margin and subsequently its bottomline.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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