India's top refiner Indian Oil Corp (IOC) posted a nearly 99% drop in its second-quarter profit on Monday, as narrowing marketing margins hurt.

The state-owned firm's standalone net profit plunged to 1.8 billion rupees ( USD 21.4 million) for the three months ending Sept. 30.

Analysts had expected a profit of 42.78 billion rupees, according to data compiled by LSEG.

IOC's average gross refining margin for April-September fell to USD 4.08 per barrel from USD 13.12 per barrel a year earlier.

KEY CONTEXT

India, the world's third-largest oil importer and consumer, usually experiences a drop in fuel demand during the four-month monsoon season starting in June. This decline is largely because of flooding in various regions, which hampers mobility.

India's fuel consumption dropped year-on-year in August and September, hitting a two-year low in the latter month.

Global crude oil prices dropped nearly 17% in the quarter ended September.

Analysts predict refining margins will stay muted on weak Chinese demand and rising refinery capacity.

Last week, smaller peers Bharat Petroleum Corp and Hindustan Petroleum Corp also reported a lower profit.