Essar Oil reverses 7-day 40.3% rally on profit booking

Essar Oil was locked at 5% lower circuit at Rs 63.20 at 12:01 IST on BSE, on profit booking after gaining 40.3% in prior seven trading sessions.

Meanwhile, the BSE Sensex was down 64.08 points, or 0.35%, to 18,251.67

On BSE, 2.01 lakh shares were traded in the counter with pending sell orders of 14,066 shares at lower circuit. The stock has an average volume of 3.61 lakh shares in the past one quarter.

The stock hit a high of Rs 69.30 and low of Rs 63.20 so far during the day. The stock hit a 52-week high of Rs 96.15 on 4 February 2013. It hit a 52-week low of Rs 46 on 31 August 2012.

The stock had outperformed the market over the past one month till 19 August 2013, rising 0.68% compared with the Sensex's 9.14% decline. The scrip, however, underperformed the market in past one quarter, falling 17.49% as against Sensex's 9.75% fall.

The mid-cap company has an equity capital of Rs 1427.59 crore. Face value per share is Rs 10.

Shares of Essar Steel saw strong pre-and-post-result rally, advancing 40.3% in seven trading days to Rs 66.50 on 19 August 2013 from a recent low of Rs 47.40 on 6 August 2013.

Essar Oil reported a net loss of Rs 863 crore in Q1 June 2013, lower than net loss of Rs 1518 crore in Q1 June 2012. Net sales rose 11.8% to Rs 22358 crore in Q1 June 2013 over Q1 June 2012, on the back of 15% improvement of throughput, which stood at 5.14 million metric tonnes (MMT) in Q1 June 2013, against 4.48 MMT in Q1 June 2012. The company declared Q1 June 2013 result during trading hours on 14 August 2013.

Earnings before interest, taxes, depreciation and amortization (EBITDA) was reported at Rs 1106 crore in Q1 June 2013 compared with a negative EBITDA of Rs 178 crore in Q1 June 2012. The current price Gross Refining Margin (GRM) jumped 49% to $7.01 per bbl in Q1 June 2013 over Q1 June 2012, reflecting the higher complexity benefits post completion of expansion and optimization projects.

The company reported a net loss of Rs 863 crore during the quarter, mainly due to negative foreign exchange fluctuations arising out of 10% rupee depreciation during the quarter. Essar Oil follows a very prudent risk management policy to hedge all its risks against currency fluctuations. As a result, the forex variations are mostly of mark-to-market nature, which is recoverable through sales or GRM in next quarters and hence have cash and earning neutral impact during the full financial year, the company said.

The company's refinery processed 5.14 MMT of crude, up 15% in Q1 June 2013 over Q1 June 2012. The refinery continues to function at over its nameplate capacity of 20 million metric tonne per annum (MMTPA) for the last four consecutive quarters with all units stabilized. During the quarter, the refinery operated at 103% of its capacity, the company said.

Share of ultra heavy crude in refinery's crude diet rose to 56% in the reporting quarter from 48% in the same period last year. Overall, the refinery processed 92% of heavy and ultra heavy crude in Q1 June 2013, Essar Oil said.

Production of valuable middle and light distillates share in the overall crude slate improved to 84% in Q1 June 2013, from 82% in Q1 June 2012 with the capability to produce Euro IV and V grade products.

Essar Oil is a fully integrated oil and gas company of international scale with strong presence across the hydrocarbon value chain from exploration and production to refining and oil retail. Essar Oil owns India's second largest single site refinery having a capacity of 20 MMTPA and complexity of 11.8, which is amongst the highest globally. It has a portfolio of onshore and offshore oil and gas blocks with about 1.7 billion barrels of oil equivalent in reserves and resources. There are more than 1,600 Essar-branded oil retail outlets in various parts of India.

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