Oil India shares drop after upstream oil company's Q1 profit nearly halves

Oil India shares reeled under pressure on Wednesday after the state-run upstream oil company reported a 49.1 per cent year-on-year fall in quarterly net profit as a decline in crude oil prices dented its revenue. Oil India (OIL) shares declined by as much as Rs 9.7 — or 3.5 per cent — to Rs 263.8 apiece in intraday trade on BSE, reversing the previous day's gain and moving away from a 52-week high of Rs 277.7 touched this month. 

After market hours on Tuesday, Oil India reported a consolidated net profit of Rs 1,426.6 crore for the first quarter of the current financial year, having nearly halved from a consolidated net profit of Rs 2,805.16 crore for the corresponding period a year ago.

Its revenue decreased 44.6 per cent on a year-on-year basis to Rs 6,408.8 crore for the quarter ended June 30, according to a regulatory filing.

However, a sharp fall in overall expenses aided the company's profitability during the three-month period. The oil exploration company's expenses for the three-month period stood at Rs 4,824 crore, 34.8 per cent lower compared with the year-ago quarter. 

The company's earnings before interest, taxes, depreciation and ammortisation (EBITDA) stood at Rs 2,277 crore for the April-June period, as against Rs 4,874 crore for the year-ago period.

Its margin — a key measure of profitability — came in at 36.6 per cent for the three-month period as against 45.6 per cent a year ago.

With inputs from Reuters

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