Essar Oil Q3: Analysts expect profit at Rs 30 cr
Essar Oil is set to declare its earnings for the third quarter of current financial year 2012-13 on Tuesday. Analysts on an average expect profit after tax at around Rs 30 crore in the quarter as against Rs 105 crore in previous quarter.
January 15, 2013 / 13:40 IST
Essar Oil is set to declare its earnings for the third quarter of current financial year 2012-13 on Tuesday. Analysts on an average expect profit after tax at around Rs 30 crore in the quarter as against Rs 105 crore in previous quarter.
Analysts are divided on whether this will be a profitable quarter for the company. Bottomline estimates are in a range from a loss of over Rs 500 crore to a profit of Rs 300 crore for the quarter. But consensus shows likelihood of a marginal profit for the company.Sales are expected to go up by 7 percent to Rs 22,500 crore in the October-December quarter of 2012 from Rs 21,023 crore in a year ago period.Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to rise to Rs 1,060 crore from Rs 1,037 crore during the same period. Operating profit margin is seen declining to 4.7 percent versus 4.9 percent year-on-year.This is the first quarter that will show the full impact of the capacity expansion to 20 MTPA.In previous quarter, the company had posted a gross refining margin (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.Assuming Essar’s GRM moves in-line with benchmark, Essar should also post USD 6.5-6.8 a barrel, say analysts. Singapore complex was down by around 28 percent in October-December quarter to USD 6.5 a barrel.But there are some aggressive assumptions by some analysts about a USD 2 a barrel premium in the quarter to Singapore complex.Therefore, analysts feel the profit or loss for the company will depend on how much Essar manages to outperform benchmark.Financial drag remains in the quarter. Interest cost in previous quarter was Rs 738 crore on EBITDA of Rs 1,037 crore.Debt-to-Equity ratio was roughly 8 times at the end of second quarter of FY13 with gross debt of USD 3 billion.Investors should watch out for forex and inventory loss. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
