Hindustan Oil Exploration Co. is looking for about a Rs 1,000 crore capital expenditure in the next three years and it plans to increase its Ebitda to Rs 1,500–2,000 crore by the financial year 2028, Managing Director Ramasamy Jeevanandam said on Friday.
The net profit of the HOEC will not be affected much due to the capex target. The revenue depends on the price of oil and gas, which is not possible to predict in an effective manner by anyone, Jeevanandam told NDTV Profit in an interview.
"We are looking for about a Rs 1,000 crore capital-expenditure programme for the next three years," he said. "Right now, we are on 3,000 barrels; we have to ramp it up to 15,000 barrels; that is our target. The B-80 block will be making about 2,500 barrels of oil equivalent per day."
The oil and gas business has its own risks and development will have certain execution risks. Apart from that, the company's gross profit margin should be more than 40%, according to Jeevanandam. "Normally our margins are good, but you also need to have good development," he said.
"We have Rs 900 crore carry-over losses in our book of account. PAT will not be impacted much, and the tax outlook will start from FY2027–28 onwards," the managing director said.
HOEC is planning in a manner so that it is more effective in creating wealth continuously. The company will be putting its additional cash into the upstream assets as much as it can, mostly on the possibility of its discoveries, according to Jeevanandam.
The oil exploration firm also plans to increase its Ebitda manifold from Rs 300 crore currently to Rs 1,500–2,000 crore by financial year 2028, driven by new supplies, the top executive said. "That will be staggering on YoY when our capital commitments get onto it."
Every year, we are planning for Rs 300 crore of investments, both onshore and offshore. By FY28, we should be able to reach the target of our Ebitda.Ramasamy Jeevanandam
Jeevanandam also talked about the demand constraints that HOEC was facing at its Dirok plant in Assam, hoping that the gas grid in the area would receive connectivity by the end of the current fiscal.
"Our production capacity is going up to 40–45 million cubic feet of gas in the Dirok field, but we would be able to uptake only 50% of it," the MD said. "This constraint will go off once the northern gas grid gets connected. Then, we would be able to double the production."
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