Nayara Energy Q3 profit up 2% as shutdown, windfall tax impact margins

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Nayara Energy, India's second largest private oil refining and fuel marketing company, saw its net profit rise by a marginal 2 percent in the third quarter ended December 31 as the company undertook a month-long maintenance shutdown and windfall tax impacted margins.

Net profit of Rs 869.8 crore in October-December compared with Rs 850.3 crore profit in the same period a year back, according to a stock exchange filing by the company.

Revenue from operations dropped to Rs 24,757.7 crore in the third quarter of the current fiscal from Rs 32,412.9 crore a year back.

This was mainly because the company fully shut its 400,000 barrels per day or 20 million tonnes per annum Vadinar refinery in Gujarat for about a month in November for routine maintenance.

The firm also operates a network of 6,497 petrol pumps or 7.5 percent of all fuel stations in the country.

For the first nine months of the current fiscal, Nayara reported a net profit of Rs 6,226.9 crore on a turnover of Rs 1 lakh crore. It had a net profit of Rs 1029.9 crore on a turnover of Rs 1.19 lakh crore for the full 2021-22 fiscal year.

The current quarter and year to date performance was impacted by external factors such as imposition of special additional excise duties and suppressed retail margins. This was more than compensated by strong operational performance by the refinery.

The government in July last year imposed a windfall profit tax by way of special additional excise duty on export of petrol, diesel and jet fuel.

Retail margins have been suppressed as public sector fuel retailers continue to sell petrol and diesel at prices capped in April last year and for private companies to match them means selling at depressed or no margins.

Sources said during this period Nayara followed its clear strategic direction of being a responsible corporate citizen by ensuring supply to its own retail outlets and also fulfilling supply commitments to state-owned oil marketing companies (OMCs) and institutional business.

The company recently reported significant progress for its entry into petrochemicals. Under Phase-1 of the project, Nayara is setting up a 450 kilo tonne per annum Polypropylene plant at its Vadinar refinery. The company aims to meet India's petrochemical needs to lower dependency on imports.