Presentationfor

Investors

FY 2004

2

PRESENTATION OUTLINE

OIL INDUSTRY OVERVIEW

COMPANY OVERVIEW

FINANCIAL PERFORMANCE

CAPITAL EXPENDITURE PLANS

GLOBALIZATION / DIVERSIFICATION

SHAREHOLDERS’ RETURN

SUBSIDIARIES OVERVIEW

OIL INDUSTRY OVERVIEW

Current scenario

4

PETROLEUM PRODUCTS - HISTORICAL DEMAND GROWTH

Source: PPAC, FY04 company estimates

Consumption grew at a CAGR of 2.7% p.a. over the last 5 years & Production registered a CAGR of 9.2% p.a.

Demand expected to grow at a CAGR of 3.7% p.a. during X plan period (2002-03 to 2006-07)

9783

100 100 99 104 104 109 108118

0.0

20.0

40.0

60.0

80.0

100.0

120.0

MMTPA

FY00 FY01 FY02 FY03 FY'04

Consumption Production

5

DOMESTIC CRUDE AVAILABILITY*

*Including condensateRefining capacities as on 1 April

The gap being met through imports

32.0

112.5

32.5

114.6

32.0

114.7

33.1

116.9

33.4

127.4

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

MM

TPA

FY00 FY01 FY02 FY03 FY04

Crude Production Refining Capacity

6

OIL INDUSTRY STRUCTUREUPSTREAM Oil & Natural Gas Corporation Ltd.

Oil India Ltd. (Exploration & Production)

DOWNSTREAM

(Refining & Marketing)

Indian Oil Corporation Ltd.

IBP Ltd. (Pure Marketing)

Chennai Petroleum Corporation Ltd.

Bongaigaon Refinery & Petrochemicals Ltd.

(Pure Refining)

Hindustan Petroleum Corporation Ltd.

Bharat Petroleum Corporation Ltd.Kochi Refinery Ltd.

Numaligarh Refinery Ltd.

(Pvt. Sector Refining)

Mangalore Refinery & Petrochemicals Ltd.*

Reliance Industries Ltd.

(Gas Transport & Distribution)GAIL India Ltd.* Pure Refining Subsidiary of ONGC

(Pure Refining)

7

INDUSTRY OVERVIEW- 31.3.2004

Market Size 107.5 MMT

IOC48%HPCL

17%

BPCL19%

Others16%RPL

26%

IOC42%

HPCL10%

BPCL14%

ONGC8%

Refining Capacity 127.4 MMT

IOC46%

HPCL12% BPCL

9%

PIL33%

Product Pipelines 62.3 MMT

Share includes subsidiary companies

Crude Pipelines 28.5 MMT

IOC100%

IOC is the only downstream company that owns crude pipelines

8

SECTOR OVERVIEW

Sector moved from APM to Market Determined Pricing Mechanism (MDPM)

Entry of private and multinational companies in the oil sector imminent

Prices of MS/HSD generally reviewed fortnightly

Subsidies on SKO/LPG reduced- to be phased out gradually over the next 2 years

COMPANY OVERVIEW

India’s largest downstream company

10

INDIA’S NO. 1 DOWNSTREAM COMPANY

(Rs/Crore) Rank Turnover 130203 1

Net Profit 7005 1

Net Worth 23047 1

Total Assets* 53852 1

Market Cap 57944 1

Exchequer Contribution 35960 1

Indian Oil is India’s largest downstream oil company 19th largest oil company in the world- Fortune Global 500

* Excluding depreciation

INDIANOIL OVERVIEW

(MMT)

FY’03 FY’04

Growth

Refining Thru’put 35.29 37.66

6.7%

Product Sales Volume* 47.56

48.61 2.21%

Pipeline Thru’put 41.11 45.17

9.88%

Fortune “Global Rank” improved to 189 in

the current year from 191 in the previous year.

Consistently “AAA” rated by ICRA since the

beginning

International ratings by both Standard & Poor’s

and Moody’s

* Including exports

12

REFINERIES – OVERVIEW

MumbaiVizag

Chennai

Cochin Narimanam

Bongaigaon

Mangalore

Numaligarh

Panipat

Guwahati

Haldia

Barauni

Mathura

Koyali

Digboi

Paradeep

Jamnagar

Bina

Other Companies’ Refineries

Existing

Under Construction/Proposed

IOC’s Refineries

Existing

Under Construction/Proposed

Subsidiary Companies

Owns 7 refineries with 41.3 MMT cap. – 32.5% REFINING SHARE

67% capacity catering to northern/western region - HIGH DEMAND & GROWTH AREAS

All refineries linked by crude pipelines - LOW TRANSPORTATION COST

All refineries linked by product pipelines- MOST COST EFFECTIVE EVACUATION SYSTEM

Potential for brownfield expansions in least time

Cuddalore

As on 1 April’04

Bhatinda

Key Facts

13

25.5338.30

56.5964.80

21.0726.50

2003-04 2006-07

Demand

Supply

(Deficit)/Surplus

KEY REFINERIES IN HIGH DEMAND REGIONS

About 67% of IOC’s refining capacity is located in close proximity to the high demand northern and western regions

(17.35)

38.3032.24

18.2014.90

(20.10)

2003-04 2006-07

Western Region

Source: Company estimates FY04, and X Plan sub group report

MM

TM

MT

Northern Region

Southern Region

MM

TM

MT

Eastern Region

Koyali

Mathura

Bhatinda

Salaya

Kandla

Panipat

14

HIGHLIGHTS - REFINERIES

Average Refinery Capacity utilisation declined marginally

During the year refining capacity increased to 41.35 MMT as on 31.3.04

Strategic inland refineries locations with most effective supply and evacuation system through pipelines

All refineries meet product specification requirement in line with environmental regulations

92.4991.08

88.0088.5089.0089.5090.0090.5091.0091.5092.0092.50

(%)

FY 03 FY 04

72.8

73.2

72.00

72.20

72.40

72.60

72.80

73.00

73.20

73.40

(%)

FY 03 FY 04

Distillate yield highest ever

15

PROACTIVELY ADDRESSING ENVIRONMENTAL ISSUES

IOC has proactive plans to meet the prospective Euro/ Bharat norms

Road Map to Vehicular Emission Norms

Euro II Euro III Euro IVMetros IntroducedApril 2005 April 2010Mega Cities* April 2003April 2005 April 2010Entire Country April 2005April 2010

IOC Investment Plans** Rs/CroreHSD Quality Improvement 1046MS Quality Improvement 2233

IOC shall be able to meet the environmental regulations well in time

*Bangalore, Hyderabad, Pune, Ahmedabad, Surat, Kanpur, Agra** Estimated cost

16

PERFORMANCE - REFINERIES

2.1 2.0

4.1

5.3

0

1

2

3

4

5

6

$/Bbl

FY01 FY02 FY03 FY04

Gross Refining Margins Refining margins in

tandem with international margins

Refineries accounts for about 50% of IOC’s earnings during FY 04

Margin enhancement opportunities thru’ stream sharing & improving crude/supply logistics

17

PIPELINES – OVERVIEW

Product

Proposed Product

Crude Oil

Proposed Crude

Product

Proposed Product

Crude Oil

Other Companies’ Pipelines

IOC’s PipelinesMumbai Vizag

Panipat

Guwahati

Koyali

Nahorkatiya

Haldia

Mathura

Manmad

Vijayawada

Kochi

BarauniKanpur

Bhatinda

Kandla

Vadinar

Chaksu

Ahmedabad

Jalandhar

Jodhpur

BudgeBudge

Kot

DelhiBongaigaon

Siliguri

Salaya

7,586 kms. of crude / product pipelines with a capacity of 56.85 MMT

Owns approx. 62% of total throughput capacity (downstream)

Low cost crude transportation to all refineries

Low cost evacuation system linked to all refineries

Two SBM near Vadinar

Key Facts

SaharanpurMeerut

Sidhpur

LucknowDigboi

Tinsukia

Karur

Chennai

Madurai

Tundla

Navgam

As at 1 April, 2004

Paradeep

18

HIGHLIGHTS - PIPELINES

Capacity utilisation declined marginally

88.3

82.9

60.0

65.0

70.0

75.0

80.0

85.0

90.0

(%)

FY03 FY 04

Capacity utilization lower due to commissioning of new pipelines.

Total capacity of pipelines increased from 52.75 MMTPA to 56.85 MMTPA during FY 04.

19

SMPL- Mathura 189.74 931.421330.6

HBCPL- Barauni 481.8 475.42 679.6

SIGNIFICANT UPSIDE

(1) Source: Company estimates

Significant increase in pipelines earnings on recovery of tariff based on rail freight

Product PipelinesAverage APM Rate(1) (Rs/MT)

Average Rate as per Railway Freight (Rs/MT) 70% 100%

KAPL-Sabarmati 63.92 154.7220.1

GSPL-Siliguri 168.66 454.3649

BKPL-Kanpur 175.81 676.06965.8

HBPL-Barauni 101.25 537.46767.8

MJPL-Jalandhar (Ex-Mathura) 118.77 537.46767.8

KBPL (Kandla - Bhatinda) 1026.28 1295.14 1850.2

KNPL-Navagam 51.19 140.14200.2

KVSPL-Sidhpur 61.3 274.19391.7

MTPL-Tundla 140 140.14200.2

Crude Pipelines

20

MARKETING OVERVIEWCONTROL RETAIL OUTLET SITES

7,239 7,5497870 8034

9127

0

2,000

4,000

6,000

8,000

10,000

FY00 FY01 FY02 FY03 FY 04

IOC is focused on strengthening its position and control in the retail segment

No

. o

f O

utl

ets

IOC Retail Outlets

29.5%35.1%

43.0% 42.4%

47.5%

5%

15%

25%

35%

45%

55%

F00 FY01 FY02 FY03. FY 04

% of Retail Outlet sitesOwned/taken over long lease

2765 retail outlets of IBP – 41.37% Company owned

21

SEGMENT MARKET SHARE* IOC has a market share of about 44% in retail

segment and about 63% in direct sales.

Direct Sales

62.7%0.3%

37.0%

IOC IBP Industry

Retail Sales

43.8%

7.3%

48.8%

IOC IBP Industry

*Among PSUs

22

PERFORMANCE - MARKETING

1.9 1.8

3.2 3.3

0

0.5

1

1.5

2

2.5

3

3.5

$/Bbl

FY01 FY02 FY03 FY04

Gross Marketing Margins Marketing accounts for

about 27% of IOC’s earnings during Apr-Mar’04

Margins have improved significantly post deregulation

Margins affected due to under recovery of subsidy on LPG/Kerosene

23

RESEARCH & DEVELOPMENT CENTRE

IOC’s world class R&D centre has won recognition for its pioneering work in the following:- Lubricants formulations- Refinery processes- Pipeline transportation- Bio-fuels

R&D has developed over 21,000 formulations of SERVO brand lubricants and greases

The centre has over 90 national and international patents to its credit

FINANCIAL PERFORMANCE

Sterling Performance

25

STRONG FINANCIAL PERFORMANCE

817

124

981

193

967

182

1105

93

1213

89

0

200

400

600

800

1000

1200

1400

Rs/Billion

FY00 FY01 FY02 FY03 FY 04

Sale of products (net) Sale of crude

(a) After commissions and discounts, exclusive of Company’s own use of oil

The revenues of the company have registered a CAGR of 8.5% over the past 5 years

26

STRONG AND CONSISTENT NET INCOME GROWTH

24 27 29

6170

0

10

20

30

40

50

60

70

Rs/Billion

FY00 FY01 FY02 FY03 FY 04

The net income has grown at a CAGR of 30.6% over the last 5 years

RONW 18.6% 18.1% 18.4% 35.7% 33.4%EPS (Rs.)* 20.92 23.29 24.70 52.35 59.97

* Bonus issue 2:1 during FY04

27

IOC FINANCIALS (Rs./Crore) FY 2003 FY 2004

SOURCES OF FUNDSNetworth 18928 23047Loan Funds 14495 12179Deferred Tax Liability 3873 4284

37296 39510APPLICATION OF FUNDSNet Fixed Assets 25370 27453Investments 5363 5596Working Capital 6563 6461

37296 39510

Borrowings reduced by 16% during FY04 Reserves increased by 22%

28

IOC FINANCIALS

FY 2003 FY 2004Gross Sales 120130 130392EBITDA 10864 12013Interest 788 453Depreciation 1662 1869Tax 2299 2686PAT 6115 7005

(Rs/Crore)

PAT increased by over 14.5% Interest cost reduced by 43%

29

RETURN ON INVESTMENT

FY’03 FY’04

Sales Revenues 120130 130392

EBITDA 10527 11847

Capital Employed 25321 28259

Return on Capital 41.6% 41.9%

Employed (ROCE)

(Rs/Crore)

Return on Capital Employed is significantly higher than IOC’s WACC, which is in the 10% range

30

PROFITABILITY RATIOS

FY’03 FY’04

Operating margin 7.7% 7.8%

Net profit margin 5.1% 5.4%

EPS (Rs)* 52.35 59.97

Cash EPS (Rs)* 66.58 75.97

IOC stock is trading at around 5 times cash earnings, reflecting an earnings yield of 20% per year

*EPS & Cash EPS for previous period adjusted for bonus issue of 1:2 in Aug’03

31

LIQUIDITY RATIOS

FY’03 FY’04

Total Debt:Equity 0.77:1 0.53:1

Long-term debt:equity 0.39:1 0.31:1

Interest cover(Times) 13.8 27.2

Phenomenal decrease in debt:equity ratio Interest Cover doubled

32

EBITDA CONTRIBUTION-SEGMENT WISE

45

2926

50

2723

0

10

20

30

40

50

(%)

FY 03 FY 04

Refineries Marketing Pipelines

CAPITAL EXPENDITURE PLANS

Consolidating Growth & Position

34

TOTAL Xth PLAN OUTLAY (2002-03 to 2006-07)

Total : 24,399 crore

Ref. Cap. Aug. & Yield Imp

25%

Petrochem.45%

Marketing3%

Ref. Quality Improv.

12%

R&D1%

Other Diversification

2%

Pipelines12%

(548)

(6149)

(3043)

(2826)(764)

(217)

Total Capital Expenditure FY 2005- 6256 crore

(10852)

35

CAPEX PLAN MAJOR PROJECTS

Estimated CostCompletion(Rs/Crore) Schedule

Ongoing Projects MS Quality Improvement Projects 2233 Jan-Sep’ 05New DHDT at Mathura (0.05%’S’ specs) 1046 Dec’ 04Panipat Refinery Expansion 3883 Apr’ 059 MMTPA Paradip Refinery Project 7500 2008-09Crude supply to Panipat through KBPL 777 Dec’ 04Production of LAB at Gujarat 1185 Aug’ 04Paraxylene & PTA at Panipat 4704 Aug’ 05Paradeep-Haldia Crude Pipeline 1178 Mar’06Naphtha Cracker Complex 6344 2007-08

36

CAPEX PLAN MAJOR PROJECTSLAB at Gujarat

Estimated Cost 1185 croreCompletion year August’04CapacityInputKerosene Stream ( TMTPA) 92Benzene (TMTPA) 40OutputLinear Alkyl Benzene (TMTPA) 120

37

Estimated Cost 4704 croreCompletion year August’05CapacityInputNaphtha (TMTPA) 500OutputParaxylene (TMTPA) 360PTA (TMTPA) 550

CAPEX PLAN MAJOR PROJECTSParaxylene & PTA at Panipat

38

Estimated Cost 6344 crore

Completion year* 2007-08

Capacity

Naphtha Cracker (TMTPA) 2170

LLDPE/HDPE Swing Unit (TMTPA) 350

HDPE Unit (TMTPA) 300

Polypropylene Unit (TMTPA) 600

MEG Unit (TMTPA) 250

*42 months after DFR approval and commissioning within 3 months

CAPEX PLAN MAJOR PROJECTSNaphtha Cracker Complex

39

Estimated Cost Rs.1178 crore

Completion year March’06

Main Line Capacity (MMTPA) 11

Tentative Length (Km)

-Offshore/Onshore 23

-Main Line 330 353

Tentative Dia (Inches)

-Offshore/Onshore 48

-Main Line 30

CAPEX PLAN MAJOR PROJECTSParadip - Haldia Crude Oil Pipeline

SIGNIFICANT INITIATIVES

Globalisation/Diversification - The path to growth

41

GLOBALISATION/DIVERSIFICATION

E & PDomestic

NELP-I, II & III: IOC, in consortium with ONGC/OIL as Operator, has obtained 11 blocks with equity stake in the range of 15%-30%.

CBM-I: IOC-ONGC consortium has 2 CBM blocks with IOC’s equity stake at 20% in each.

IOC has farmed-in with 27% participating interest in an Exploration Block in Assam-Arunachal Pradesh, with Premier Oil (38% & Operator), HOEC (25%) & OIL (10%).

IOC Board has also approved farm-in with 35% participating interest in an Exploration Block in Cachar, Assam, with Premier Oil (49% & Operator) & Essar Oil (16%). Farm-in agreement signed.

42

GLOBALISATION/DIVERSIFICATION

E & POverseas

Consortium of ONGC Videsh, Oil India & IOC awarded the Farsi Exploration block in Iran. IOC has a 40% stake in the block.

IOC – ONGC-VL Alliance, in consortium with BP and Occidental, has been participating in the bidding process for Kuwait Project for development of Northern Kuwait Oilfields.

GAS Dahej Terminal of Petronet LNG commissioned Expected positive contribution from Gas

business – Rs.670 crore in FY 2005

43

GLOBALISATION/DIVERSIFICATION

PETROCHEMICALS PX-PTA plant with PX- 360 TMT and PTA- 550

TMT capacity planned at Panipat for value addition of naphtha

LAB facility- 120 TMT at Gujarat refinery Naphtha Cracker Complex - 2.17 MMTPA

OVERSEAS DOWNSTREAM MARKETING

Entered into retail business in Sri Lanka thru’ Lanka IOC (WOS) – Trincomalee Tankfarm of 1 million KL taken over and supplies to LIOC commenced

WOS established in Mauritius for building infrastructure and enter into downstream business

SHAREHOLDERS’ RETURN

Wealth Maximisation

45

SHAREHOLDING PATTERN 31.3.2004

82.0%

9.1%3.5% 5.4%

GOI ONGC Public* Others

* Including employees

46

RETURN TO SHAREHOLDERS

Bonus 1981-821994-951999-002003-04

1:2 2:1 1:1 1:2

Periodic sharing of reserves to reward shareholders

Consistent dividend payment for the last 38 years

Dividend payment for FY 04 - 2453 Crore

95%110%

193%*210%

0%

50%

100%

150%

200%

250%

2000-01 2001-02 2002-03 2003-04

* Post bonus of 1:2

47

RETURN TO SHAREHOLDERSMarket Capitalisation

Highest market cap since listingThird position in market

capitalisation

15566 18093

57944

0

10000

20000

30000

40000

50000

60000

Rs./crore

31.3.02 31.3.03 31.3.04

SUBSIDIARIES OVERVIEW

Positive Contribution

SUBSIDIARIES OVERVIEW

10.5*

2.35

7.04

2.13

02468

101214

MMTPA

Ref. Cap. Crude Thru'put

CPCL BRPL

Refining capacity utilization for FY04

CPCL BRPL93.9% 90.5%

12.85

9.17

* 3MMTPA capacity added on 31 Mar’04

GROUP OVERVIEW

Combined synergies of IOC & IBP shall enable the company to tackle competition

Note: Domestic sales & Market share among PSUs

51

4.6

0%

20%

40%

60%

80%

100%

Market Share

IOC IBP

55.6%

46.8

4.2

0

10

20

30

40

50

60

MM

TPA

Sales Vol.

IOC IBP

51.0

51

FINANCIAL PERFORMANCE SUBSIDIARIES

Turnover PAT

FY ’03 FY04 FY ’03 FY’04

CPCL 80898697 303400

BRPL 1862 2849 178

304

IBP 877410535 88 215

Lanka IOC 65 725 4 7

(Rs/Crore)

52

FINANCIAL PERFORMANCE SUBSIDIARIES

IOC’s subsidiaries performing better- combined profits of BRPL, CPCL, IBP & LIOC increased by over 350 crores

Several initiatives launched to build on combined strength: Rationalisation of assets Optimisation of resources Sharing of refinery streams MOU’s for better business relations

53

MARKET CAPITALISATION SUBSIDIARIES

433 446281

1299

2160

1549

0

500

1000

1500

2000

2500R

s/C

rore

FY 03 FY 04

IBP CPCL BRPL

Phenomenal increase in market cap. of subsidiaries

54

Thank You