The Hindu Business Line : Essar Oil stock active on renewed buying

THE Essar Oil stock on Wednesday was relatively more active on the National Stock Exchange on renewed interest from traders and speculators. Certain operators have shown interest from time-to-time in the recent months in the counter. A couple of noted operators have also reportedly been cornering the stock. According to dealers, some of the operators are now exiting the counter quietly.

The counter on Wednesday clocked a traded quantity of 7.47 lakh (2.54 lakh) shares on the National Stock Exchange. This is the highest volume recorded in the last 10 sessions. The counter recorded bulk deals involving 10,000 or more shares. According to Mr Ketan Thacker of Anagram Stockbroking, at today's closing price of Rs 22.80 (Rs 21.65), the stock traded at 76 times its earnings per share of Rs 0.30 in trailing four quarters.

The September-December quarter results showed declines in net sales and profit by 10 and 69 per cent respectively.

Last month, the Supreme Court allowed Essar Oil to go ahead with its Rs 9,800 crore, 12-million tonne Jamnagar refinery ending the long delay surrounding its pipeline passing through Vadinar marine sanctuary in Gujarat. Some 64 per cent of the project work is over and the rest is to be completed by third quarter of 2005.

According to analysts, the recent raising of FDI ceiling in private refining and marketing outfits to 100 per cent, is considered positive. Unconfirmed market talks suggest that the company was attempting to rope in a strategic investor for the refinery project.

The company's ambitious retail plan of setting up 1,700 outlets by 2005 has been plagued by delays. It has so far set up 10 retail outlets in Maharashtra, Rajasthan and Gujarat. It is also reportedly selling petrol and diesel at cheaper rates than the oil PSUs. By the end of March, the management expects to set up 50 outlets. According to the revised plan, 500 outlets, most of which would be through franchises, are targeted to be set up by 2004-05.

The Essar Oil stock's 52-week high is Rs 30 and low is Rs 3.60.