Chennai Petroleum consolidated Q1 net at ₹1,031 crore on stronger refining margins

Chennai Petroleum Corporation Ltd (CPCL) reported a consolidated net profit of ₹1,031 crore for the quarter ended June 30, 2026 (Q1FY27) against a net loss of ₹40 crore in the corresponding quarter last year.

Sequentially, however, profit declined from ₹1,421 crore reported in the March quarter.

Revenue for the June quarter rose 57 per cent to ₹29,359 crore from ₹18,683 crore a year ago.

CPCL’s average Gross Refining Margin (GRM) nearly tripled to $8.78 per barrel during April-June 2026 from $3.22 per barrel a year earlier, excluding a one-time revenue adjustment.

The company also recognised ₹385 crore as additional revenue during the quarter following the retrospective revision in petroleum product prices effective March 16, 2026, relating to supplies made during March.

The company’s Managing Director H Shankar said the refinery’s operational performance was the highlight of the quarter as the company sustained throughput above rated capacity despite severe constraints in sourcing Middle East crude.

The company achieved a crude throughput of 2.85 million tonnes. The company also recorded its highest-ever distillate yield, reflecting improved operational efficiency, a statement read.

“We maintained 108 per cent capacity utilisation during a difficult geopolitical period when supplies of Middle East crude had almost dried up, forcing the company to rely largely on Russian and African crude,” he told businessline.

Explaining the turnaround from a loss in the year-ago quarter, Shankar said the biggest driver was stronger refining economics.

“The main reason was favourable product pricing and very strong refining cracks - the difference between refined product prices and crude oil costs- available for standalone refiners. The higher product prices also helped lift revenue during the quarter, he said.

However, the quarter was not without challenges.

Compared to the March quarter when crude was around $80 per barrel, crude procurement costs increased sharply, with average crude prices nearing $100 per barrel, the MD pointed out.

In addition, discounts on crude largely disappeared, while Russian and African crudes carried premium prices along with higher freight and insurance costs, said Shankar.

The company benefited from lower excise duty following the reduction in central excise on petrol and diesel from March 27,2026, resulting in a lower excise outgo during the quarter, he said.

While crude procurement from the Middle East remains uncertain, the company has built alternative supply chains (through its parent company Indian Oil Corporation) for Russian and African crude and expects adequate availability, said Shankar.

Going forward, CPCL’s focus would remain on operational excellence, lowering fuel and energy losses, controlling costs and optimising its product mix to protect profitability amid volatile global markets, said Shankar.