Oil refining major Essar Oil reported a 62 per cent increase in net profit for the third quarter of 2013-14. Stable crude oil and dollar prices coupled with operational efficiencies helped the company achieve the results.

For the quarter, the company clocked a profit of ₹52 crore, which was ₹32 crore in the year-ago quarter. On the other hand, the net sales of the company grew by a modest 5.34 per cent to ₹25,089 crore (₹23,817 crore). The Gross Refining Margins (GRMs), which is the difference between the value of petroleum products sold and the cost of processing crude, reduced to $7.93 per barrel during the quarter from $9.75 in the previous quarter. The company has attributed the dip in the GRMs to 35 per cent decline in petrol cracks spread.

Crack spread is a term used in the oil industry for the differential between the price of crude oil and petroleum products extracted from it. Lesser the crack spread more the profitability for the industry.

The EBITDA for the quarter stood at ₹1,202 crore, which was almost at the same level compared to ₹1,241 crore in the previous quarter.

Managing Director LK Gupta said that during the quarter, the company realised 58 per cent of its revenues from the domestic market, against 44 per cent in the immediate past quarter on account of improved domestic demand for fuel oil.

On the BSE, the stock closed at ₹52.95, an increase of 1.53 per cent over the previous close.

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