Oil India shares drop after upstream oil company's Q1 profit nearly halves

Oil India shares traded under pressure after the state-run upstream oil company reported a 49.1 per cent year-on-year fall in its quarterly net profit.

Oil India reported its financial results for the June quarter on August 8. | Image: Oil-India.com

Oil India shares reeled under pressure on Wednesday after the state-run upstream oil company reported a 49.1 per cent year-on-year fall in quarterly net profit as a decline in crude oil prices dented its revenue. Oil India (OIL) shares declined by as much as Rs 9.7 — or 3.5 per cent — to Rs 263.8 apiece in intraday trade on BSE, reversing the previous day's gain and moving away from a 52-week high of Rs 277.7 touched this month.

After market hours on Tuesday, Oil India reported a consolidated net profit of Rs 1,426.6 crore for the first quarter of the current financial year, having nearly halved from a consolidated net profit of Rs 2,805.16 crore for the corresponding period a year ago.

Its revenue decreased 44.6 per cent on a year-on-year basis to Rs 6,408.8 crore for the quarter ended June 30, according to a regulatory filing.

TRENDING NOW

However, a sharp fall in overall expenses aided the company's profitability during the three-month period. The oil exploration company's expenses for the three-month period stood at Rs 4,824 crore, 34.8 per cent lower compared with the year-ago quarter.

The company's earnings before interest, taxes, depreciation and ammortisation (EBITDA) stood at Rs 2,277 crore for the April-June period, as against Rs 4,874 crore for the year-ago period.

Its margin — a key measure of profitability — came in at 36.6 per cent for the three-month period as against 45.6 per cent a year ago.

Revenue from crude oil fell 28.7 per cent to Rs 3,364.7 crore and that from refinery products decreased 74.4 per cent to Rs 2,236 crore, according to the filing. The company registered a 40.6 per cent drop in revenue from LPG to Rs 40.1 crore. Revenue from renewable energy declined 26.3 per cent to Rs 34.6 crore.

On the other hand, revenue from natural gas increased eight per cent to Rs 1,113.1 crore.

Crude oil prices dropped more than 43 per cent in the June quarter, from a peak last year. More than four-fifths per cent of the country's annual gas output of 91 billion cubic metres comes from old fields owned by state-run ONGC and Oil India.

With inputs from Reuters

Catch latest stock market updates here. For all other news related to business, politics, tech, sports and auto, visit Zeebiz.com.

TAGS: