Cairn India tumbles after Q4 earnings

Cairn India lost 4.78% to Rs 335.45 at 9:17 IST on BSE after consolidated profit after tax rose 18% to Rs 3035 crore on 16% growth in revenue to Rs 5049 crore in Q4 March 2014 over Q4 March 2013.

The Q4 result was announced after market hours on Wednesday, 23 April 2014.

Meanwhile, the S&P BSE Sensex was down 37.52 points or 0.16% at 22,839.02.

On BSE, so far 57,000 shares were traded in the counter as against average daily volume of 1.72 lakh shares in the past two weeks.

The stock hit a high of Rs 352.30 and a low of Rs 334.20 so far during the day.

Cairn India's consolidated earnings before interest, taxation, depreciation and amortization (EBITDA) jumped 26% to Rs 3654 crore in Q4 March 2014 over Q4 March 2013. EBITDA margin surged to 72% in Q4 March 2014, from 67% in Q4 March 2013.

Cairn India's consolidated profit after tax (PAT) rose 5% to Rs 3035 crore on 1% growth in revenue to Rs 5049 crore in Q4 March 2014 over Q3 December 2013. EBITDA rose 3% to Rs 3654 crore in Q4 March 2014 over Q3 December 2013. EBITDA margin edged up to 72% in Q4 March 2014, from 71% in Q3 December 2013. Cairn India said that the 5% sequential growth in PAT in Q4 March 2014 was primarily led by increase in investment income consequent to realisation of gains on maturity of investible funds and one time charge of ESOP policy change accounted in previous quarter.

Consolidated PAT rose 3% to Rs 12432 crore on 7% growth in revenue to Rs 18762 crore in the year ended 31 March 2014 (FY 2014) over the year ended March 2013 (FY 2013). Cairn India said that revenue growth in FY 2014 was driven by increase in working interest volume to 137.1 kboepd in FY 2014, from 127.8 kboepd in FY 2013 and due to benefit from rupee depreciation. This increase was partly offset by higher profit sharing with the Government of India (GoI) in DA1 consequent to tranche change, Cairn India said. The company said its forex gain was higher at Rs 739 crore in FY 2014 on account of over 10% rupee depreciation against the dollar.

Cash and cash equivalents stood at Rs 13707 crore in rupee funds and $1.53 billion in dollar funds as on 31 March 2014, part of which is expected to be used for share buy-back and dividends, Cairn India said. Till 31 March 2014, Cairn India has bought back 32.70 lakh shares for a total consideration of approximately Rs 106 crore from the open market through stock exchanges under the ongoing share buyback programme.

With regard to future business outlook, Cairn India said that the management remains committed to create long term shareholder value. Considering the significant potential in the Rajasthan asset, the company will continue to focus on key development projects to enhance recovery with overall planned net capex of $3 billion by FY 2017, it said. The company said it is targeting to achieve reserve replacement ratio of 150% in next 3 years subject to PSC extension till 2030 and a 3 year production CAGR of 7-10% from known discoveries with flat production in FY 2015. Further exploration activity across the portfolio provides additional value upside and momentum while technology adoption supports low cost operations and development, Cairn India said.

The company's board recommended a final dividend of Rs 6.50 per share for FY 2014, entailing an outflow of approximately Rs 1451 crore including dividend distribution tax. This along with the interim dividend paid in October 2013 cumulatively amounts to around 22.46% of the company's annual consolidated net profit.

Cairn India is primarily engaged in the business of oil and gas exploration, production and transportation. The company sells its oil to major refineries in India and its gas to both public sector units and private buyers.

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