Essar Oil gains 3.6% after turning profitable in Q3

Shares of Essar Oil gained as much as 3.6 percent in early trade on Wednesday after the company reported a net profit of Rs 32 crore in the third quarter of current financial 2012-13 as compared to a loss of Rs 362 crore in a year ago period, mainly on improved margins.

The company has registered gross refining margins at USD 9.75/bbl as against USD 3.82/bbl reflecting higher complexity benefits post expansion of projects. The company's net sales grew 14% to Rs 23, 817 crore,YoY. This is the first quarter showing the full impact of the capacity expansion to 20 MTPA (million tonnes per annum). In previous quarter, the company had posted a GRM of USD 7.86 a barrel, a discount of USD 1.2 a barrel as compared to Singapore complex at USD 9.1 a barrel. The foreign research firm Goldman Sachs has recommended a buy rating on the stock with a target price of Rs 91. "GRMs at USD 9.75 a barrel and high refinery throughput surprised positively, but the solid operational performance was dented by a near 20 percent rise in interest costs," the firm said. At 09:38 hours IST, shares rose 1.51 percent to Rs 73.90 on Bombay Stock Exchange. Also Read
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