Cess may impact EPS of Oil India, ONGC, Cairn: Prabhudas Lilladher

MUMBAI: Shares of oil companies have been reeling under pressure after the Finance Minister Pranab Mukherjee hiked cess on crude oil to Rs 4500 per tonne from Rs 2500 per tonne.

“The move is likely to result in additional revenues of around Rs 66,500 million for the government over the last year revenues of Rs 83,140 million. Cairn India EPS on this count is likely to decline by Rs 4.7/share (a decline of 8.1% to Rs 53.6/share). On the NAV, the cess adversely impacts the target price from Rs 405/share earlier to Rs 383/share (decline of Rs 22/share),” said Prabhudas Lilladher report.

The report added that if the government does not provide ONGC and Oil India with lower subsidy to factor higher cess, EPS of ONGC would decline by around Rs 3.9/share to Rs 26.7/share and in case of OIL India, the EPS could decline by around Rs22.9/share to Rs129.6/share.