Cairn India

This itself should say it all – Cairn India, in current Q3FY16 sold its oil at $34.5/barrel v/s the price of $68/barrel in previous Q3. And sequentially, realization fell from $35.2, a drop of 19%.

And this in itself explains why the company, for the current Q3 reported a jaw dropping 99% fall in consolidated net profit at Rs. 9 crore v/s Rs.673 crore in Q2 and Rs.1350 crore in Q3FY15. Net revenue fell 42% (YoY) and 9% (QoQ) at Rs.2039 crore. Also as per the pricing formula fixed by the Govt, oil and gas exploration companies like Cairn have to pay a cess of Rs.4500 per ton on domestic crude oil produced and this rate is fixed, not based on the oil prices. Over and above this, Cairn also has to pay royalty and petroleum profit.

The company actually had a loss before tax at Rs.41 crore but it was the tax write back of Rs.70 crore which helped it end the quarter at least in the black.

EBITDA for the quarter came in at Rs.665 crore with a healthy EBITDA margin of 33%. Lower revenue and increase in the overall operating cost led to decline in EBITDA. A relatively stable Rupee as compared to 3.3% depreciation versus US Dollar in the second quarter resulted into a lower forex gain of Rs.49 crore in current Q3 v/s Rs.381 crore in Q2.

Its cash and cash equivalent position was at Rs.18,470 crore (US$ 2.8 billion), of which 68% is invested in rupee funds and 32% in dollar funds.