Cairn India fell 3.07% to Rs 289.35 at 12:45 IST on BSE after a foreign brokerage downgraded the stock to 'underweight' from 'neutral.'
Meanwhile, the BSE Sensex was down 164.02 points, or 0.62%, to 26,473.26.
On BSE, so far 1.27 lakh shares were traded in the counter, compared with an average volume of 1.80 lakh shares in the past one quarter.
The stock hit a high of Rs 295 and a low of Rs 287.30 so far during the day. The stock hit a 52-week high of Rs 385 on 10 June 2014. The stock hit a 52-week low of Rs 286.20 on 8 October 2014.
The stock had underperformed the market over the past one month till 9 October 2014, falling 12.68% compared with 2.30% fall in the Sensex. The scrip had also underperformed the market in past one quarter, sliding 15.09% as against Sensex's 4.69% rise.
The large-cap company has an equity capital of Rs 1874.79 crore. Face value per share is Rs 10.
The foreign brokerage said production from key oil field in Rajasthan will peak in fiscal year 2016. Taking into account other production forecasts, Cairn India's earnings may have already peaked in fiscal year 2014, the brokerage added.
Shares of Cairn India also declined as crude oil prices edged lower. Brent crude futures tumbled amid speculation that rising global oil supplies will be more than enough to meet slowing demand. Brent for November settlement was down $1.14 a barrel at $88.91 a barrel. The contract dropped to $88.11 a barrel in intraday trade -- its lowest level since December 2010. Lower crude oil prices will result in lower realizations from crude sales for oil exploration firms like Cairn India.
Meanwhile, Cairn India issued production update during trading horus today, 10 October, 2014. The company announced that average gross production in the first half of year ending March 2015 (H1 2015) was 206,125 barrels of oil equivalent per day (boepd), 3% lower than the previous year due to the planned maintenance shutdown at the Rajasthan facilities and a suspension of gas sales at the Ravva block, partially offset by higher production at the Cambay block.
In Q2 September 2014, average gross operated production and working interest production were 9% and 7% lower year on year (yoy) at 194,508 boepd and 123,178 boepd, respectively.
At Rajasthan, the company successfully completed the planned shutdown announced in Q1 June 2014, for routine operational and statutory maintenance activity at the Mangala Processing Terminal, which resulted in lower production of 163,262 boepd, with Development Area (DA)-1 and DA-2 producing gross averages of 134,539 boepd and 28,723 boepd respectively. The company said it is back to normal production levels at Rajasthan after the shutdown; excluding the shutdown period, Q2 production was comparable to Q1 June 2014. The company said it also utilized this opportunity to tie-in new facility enhancements related to development projects.
At Ravva, gas sales have been suspended since 4 July 2014 on account of one of the customers undertaking a major unplanned maintenance activity within their Andhra Pradesh pipeline network. Hence, production at Ravva was lower at 20,596 boepd during the quarter despite a positive oil contribution from the 4D infill well campaign.
At Cambay, production increased by 23% yoy at 10,651 boepd during Q2 on account of successful well intervention measures undertaken in the previous quarter, Cairn India said in a statement.
On a consolidated basis, Cairn India's net profit fell 65.05% to Rs 1092.90 crore on 10.33% rise in total income from operations (net) to Rs 4482.85 crore in Q1 June 2014 over Q1 June 2013.
The steep fall in the company's bottom line was due to an exceptional deprecation charge of Rs 1627.39 crore with retrospective effect in Q1 June 2014 due to change in method of depreciation from Straight Line method (SLM) to the Unit of Production (UOP) method.
Cairn India is primarily engaged in the business of oil and gas exploration, production and transportation. The company sells its oil to major refineries in India and its gas to both public sector units and private buyers.
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