Cairn India Q1 net up 9-fold to 2,726 cr

Oil explorer Cairn India reported a more than 9-fold jump in quarterly profit to Rs 2,727 crore from Rs 280 crore in the year-ago period. The rise in profit is being attributed to higher output. The company has said it would seek shareholder approval on the conditions set by the Indian government for its deal with Vedanta Resources.

Revenue surged more than four times to Rs 3,713 crore.

Cairn's total Income has increased from Rs 869 crore for same quarter last year to Rs 3,765 crore for the quarter under review.

Last month, India gave conditional approval to Vedanta Resources to buy a 40% stake in Cairn India from its British parent Cairn Energy, in a deal valued at around $6 billion.

India's oil ministry has been pushing Cairn India to share royalty payments with state-run Oil and Natural Gas Corp, which has a 30% holding in the Cairn-operated fields in western India but pays 100% of the royalties.

Treating royalty as a cost for developing the field was one of the conditions set by the government to clear the deal with Vedanta.

Cairn India said in a statement late on Tuesday if royalty were to be cost recoverable it would lead to a decline in revenue and profit for the June quarter by Rs 1,292 crore.

Cairn India said it would hold a postal ballot of all the shareholders to consider the conditions imposed by the Indian government.

Cairn India touched an intraday high of Rs 328 and an intraday low of Rs 324. At 09:31 am the share was quoting at Rs 326, up Rs 2.95, or 0.91%.

It was trading with volumes of 77,883 shares. In the previous trading session, the share closed down 1.43% or Rs 4.70 at Rs 323.05.

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