Hindustan Oil Exploration Company Ltd. expects its revenue and net profit to surge threefold in the next financial year, driven by increase in its output.
It’s profit rose 132 percent sequentially in the third quarter ended December as volumes at its Assam field jumped. Shares of the oil explorer rose as much as 9 percent today after the company announced earnings. The stock has almost doubled in the last one year.
The company is likely to complete 2017-18 with numbers similar to the last financial year, Managing Director P Elango told BloombergQuint in an interview. It, however, expects a jump in revenue and net profit next year.
Higher output will push its revenue to Rs 150 crore and profit to Rs 100 crore in the year ending March 2019, Elango said. That compares with a turnover of Rs 42 crore and a profit of Rs 36 crore in the year ended March 2017.
Hindustan Oil Exploration looks to ramp up gas production in Assam from the first quarter of the next financial year, taking its daily production to 36 standard cubic meters, said Elango. It would add close to Rs 100 crore to the top line, and its other fields are expected to add Rs 50 crore, he said.
The company is also looking to re-open its offshore gas field (PY-1) in the Bay of Bengal, which will start adding to its output from the quarter ending September. Drilling will increase the production from 2.5 million cubic feet to 10 million cubic feet, he said.
It expects to maintain operating margins at 75 percent in the next financial year because of fixed operating costs and a low-cost base. Hindustan Oil Exploration is debt free and has a cash of Rs 150 crore.