Cairn falls 3% on more than 50% cut in FY16 capex plan

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26 Aug, 2025 12:21

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Moneycontrol Bureau

Shares of Cairn India fell 3.4 percent intraday Thursday as the oil major cut its capital expenditure (capex) plan for the next financial year post fall in oil prices.

"With close to USD 1.1 billion of capex invested in FY15, the company is revising the capex for FY16 from the projected USD 1.2 billion to 500 million, while deferring the rest," said the company in its filing to the exchange.

Cairn India has taken a proactive approach to capital allocation and shareholder returns due to sharp fall in oil prices. Brent crude fell to USD 60 a barrel from USD 115 a barrel in June 2014.

The company will be undertaking projects that are economically viable at current oil prices. Additionally, the management focus is on re-engineering projects and re-negotiating contracts to improve project economics.

"The company will remain agile to make investments to enhance volumes. However, despite the partial deferment of capex, the volumes will yet see growth in the coming fiscal," said the oil exploration company. Cairn had sacked some employees last month to keep costs in check as falling crude oil prices hurts its bottomline.

Cairn's statement said it has received management committee approval for the Raag Deep Gas Project in oil-rich Rajasthan block. "As always, the focus will be on free cash flow after capex and dividend payout," it adds.

Mayank Ashar, Managing Director & CEO of Cairn India said, "We would like to give confidence to our shareholders that we are more focused than ever to drive operational efficiencies in the current crude price environment. Our cash rich balance sheet and best-in-class cost profile provide a solid foundation to operate our high margin core fields."

At 13:11 hours IST, the scrip of Cairn India was quoting at Rs 237.35, down Rs 6.75, or 2.77 percent on the BSE.

Posted by Sunil Shankar Matkar