May 30 (Bloomberg) -- Indian Oil Corp., the nation’s biggest refiner, beat estimates with a record profit in the fourth quarter after it received compensation from the government for selling fuels below cost.
Net income rose 15 percent to 145.1 billion rupees ($2.3 billion), or 59.77 rupees a shares, in the three months ended March 31 from 126.7 billion rupees, or 52.19 rupees a share, a year earlier, the New Delhi-based company said in a regulatory filing today. That exceeded the 141.9 billion-rupee median profit estimate of 22 analysts surveyed by Bloomberg. Net sales rose 9.7 percent to 1.28 trillion rupees.
Indian Oil depends on government support as it’s ordered to sell fuels below the cost of production to help curb inflation. Finance Minister Palaniappan Chidambaram’s attempt to narrow the budget deficit by raising diesel prices and giving refiners the freedom to set gasoline prices is helping boost profit for Indian Oil and its rivals Bharat Petroleum Corp., and Hindustan Petroleum Corp.
Indian Oil received 237.1 billion rupees in the quarter as compensation from the government, compared with 208.6 billion rupees a year earlier, Finance Director P.K. Goyal told reporters today in New Delhi.
Indian Oil shares rose 0.9 percent to 294.50 rupees at the close in Mumbai. The stock has gained 9.1 percent this year, compared with a 4.1 percent increase in the benchmark S&P BSE Sensex index.
The rupee rose 1.3 percent against the dollar in the last quarter, lowering crude oil import costs for Indian refiners, which purchase more than 80 percent of their requirement from overseas. The currency has declined 3.7 percent this quarter, dropping to the lowest level since July.
Brent crude, a benchmark for more than half of the world’s oil, fell 4.9 percent on average in the quarter compared with a year earlier, reducing costs for Indian Oil.
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