Essar Oil Q1 revenue at Rs 12,048 cr, posts Rs 70-cr loss

Essar Oil clocked a revenue of Rs 12,048 crore in Q1 FY11, up 52 per cent from the year-ago figure, but posted a loss of Rs 70 crore largely due to a contraction in its gross refining margins (GRMs).

Company Managing Director Naresh Nayyar said in a statement that "while the operational performance of the company has been excellent on most parameters, our profitability has been affected by depressed refining margins".

"Demand for petroleum products continues to demonstrate strong growth, supported by growth in the Indian economy, increase in per capita income, growth in vehicles and the government’s focus on infrastructure spending," he added.

"India will remain the anchor market for Essar Oil's expanded refinery capacity and continue to expand its retail network to realise the market opportunities that deregulation of auto-fuel pricing will throw up," he said.

Following the deregulation of petrol prices and hints from the government that the same would be done for diesel prices, Essar has planned to increase the number of its retail outlets to 1,700 by March 2011.

The company currently has 1,340 outlets.

The Essar Group company has also signed an agreement with GAIL for setting up CNG outlets to dispense the latter’s gas across all Essar Oil branded retail outlets in India.

As much as 2.3 MMT of fuel products was sold by the company in the domestic market in Q1 FY11, the release said.