Indian Oil Corporation (IOC), India's leading oil refining and marketing company, has announced a significant expansion of its renewable energy capacity and declared a final dividend for FY2025.

Expanding Green Energy Footprint

The company's Board of Directors has approved an additional equity investment of Rs 1,086.00 crore in its wholly-owned subsidiary, Terra Clean Ltd, to set up 4.30 GW of renewable energy projects.

This latest investment builds upon IOC's previous commitment. In March 2023, the company had announced the formation of Terra Clean Ltd and an initial equity investment of Rs 1,303.75 crore for implementing 1 GW of renewable energy projects. With this new infusion, IOC is set to dramatically scale up its clean energy portfolio.

Strategic Move Towards Sustainability

The decision to expand renewable energy capacity aligns with IOC's broader strategy to diversify its energy portfolio and reduce its carbon footprint. This move is particularly significant given IOC's position as a major player in the fossil fuel industry.

Financial Implications

The additional investment of Rs 1,086.00 crore represents a substantial commitment from IOC towards green energy. This brings the total investment in Terra Clean Ltd to Rs 2,389.75 crore, earmarked for a combined renewable energy capacity of 5.30 GW.

Investment Breakdown

Final Dividend Announcement

In addition to the renewable energy investment, IOC's board has recommended a final dividend of Rs 3.00 per equity share for FY2025, totaling Rs 4,236.40 crore. This dividend is subject to shareholder approval at the upcoming Annual General Meeting (AGM) and will be paid within 30 days of declaration. The government, which owns 51.5% equity in IOC, is set to receive Rs 2,181.65 crore in dividends.

Market Response

The announcements were made after market hours on April 30, 2025. Investors and market analysts will be keenly watching how these strategic moves impact IOC's stock performance and long-term valuation.

Future Outlook

As India pushes for greater adoption of renewable energy, IOC's significant investment in this sector could position the company as a key player in the country's energy transition. The success of these projects could pave the way for further investments in clean energy technologies by the oil major.

IOC's commitment to expanding its renewable energy portfolio, coupled with its consistent dividend payouts, demonstrates the company's balanced approach to growth and shareholder returns. This strategy reflects the shifting priorities in India's energy sector , as traditional oil and gas companies increasingly diversify into cleaner energy sources while maintaining their financial commitments to stakeholders.

Indian Oil Corporation (IOC), India's leading oil refining and marketing company , has announced strong financial results for the fourth quarter of fiscal year 2025, showcasing significant improvement across key metrics, including a substantial increase in its Gross Refining Margin (GRM) and a remarkable 152% quarter-on-quarter surge in net profit.

Financial Highlights

IOC reported a consolidated revenue of ₹221,360.24 crore for Q4 FY2025, slightly up from the previous quarter. The company's net profit soared to ₹7,265.00 crore, marking a substantial 152% increase from the previous quarter.

The company's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) for Q4 FY2025 stood at ₹16,547.84 crore, with an improved EBITDA margin of 7.48%.

Operational Performance

IOC's Gross Refining Margin (GRM) for the fourth quarter has risen significantly to $8.00 per barrel, up from $2.90 per barrel in the previous quarter. This figure exceeds market estimates, which ranged between $4.50 to $6.00 per barrel, indicating a strong operational performance.

The average gross refining margin (GRM) for FY2025 was $4.80 per barrel, compared to $12.05 per barrel in FY2024. The core GRM, after offsetting inventory losses/gains, came in at $4.53 per barrel for FY2025.

Dividend Announcement

The Board of Directors has declared a dividend of ₹3.00 per equity share (face value: ₹10.00 per share) for FY2024-25, subject to approval by shareholders at the upcoming Annual General Meeting.

Segment Performance

The Petroleum Products segment continued to be the primary revenue driver, contributing ₹206,132.19 crore to the total revenue in Q4 FY2025. The Gas and Petrochemicals segments also showed positive performance, with revenues of ₹11,189.69 crore and ₹7,225.87 crore, respectively.

Balance Sheet Strength

As of March 31, 2025, IOC's consolidated total assets stood at ₹506,867.05 crore, with a net worth of ₹186,487.32 crore. The company maintained a healthy debt-to-equity ratio of 0.75, indicating a strong financial position.

Conclusion

Indian Oil Corporation strong Q4 results, particularly the significant increase in GRM and the 152% quarter-on-quarter growth in net profit, reflect its resilience and operational efficiency in a dynamic market environment. The company's focus on diversification across the energy value chain and its financial prudence continue to drive its performance.