Windfall tax affects Chennai Petro's profitability — down 99% to Rs 28 crore

The company attributed the drop in revenue due to the imposition of duties on exports of petroleum products, starting July 1.

"The windfall taxes are definitely impacting the profitability ... roughly that may be around $10 to 12 per barrel," Arvind Kumar, MD, Chennai Petroleum Corporation, said.

Kumar told CNBC-TV18 that the company is working on new projects which will increase earnings from specialty products. "Chennai Petroleum meets the demand of the Tamil Nadu state in particular and neighboring states as well. We give our feedstock to various neighbouring industries and those around the chemical and petrochemical industries are around 20-24 industries. We are also making around 7-8 percent specialty products that may be hexane, wax, propylene. We would like to increase those."

The company's consolidated EBITDA declined 93 percent from the previous quarter to Rs 228 crore and the operating margin fell to 1.2 percent from 14.7 percent by the end of June.

Gross Refining Margin, or the difference between the value of the product leaving the refinery from when it enters the market, dropped to $4.4 per barrel, down from $25 per barrel in the previous quarter.

Kumar said that the company has spent Rs 750 crore on the new refinery. "The equity portion will be done from our own accruals and equity portion is around Rs 2,500 crore and we have already spent around Rs 750 crore. And the rest of the expenditure will be met through the accruals," he said.

On Thursday, the shares of Chennai Petroleum slumped 12 percent during the later half of the trade, marking the stock's biggest single-day drop since June 2022.