State-run Oil India Ltd (OIL) on Monday (September 4) said it has received board approval for its equity investment of up to Rs 1,738 crore in the joint venture company, the North East Gas Distribution Company Ltd (NEGDCL), formed in partnership with Assam Gas Company Ltd (AGCL).

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This strategic investment aligns with Oil India's 49 percent shareholding in NEGDCL, as it takes a substantial step forward in the execution of city gas distribution (CGD) projects, according to a stock exchange filing.

The board of directors of Oil India Ltd convened a meeting on September 4, 2023, to deliberate on the equity contribution and unanimously greenlit the allocation of funds.

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Oil India reported a 4 percent rise in net profit in the June quarter on the back of higher production, which offset a reduction in price. The company registered a net profit of Rs 1,613.34 crore in the first quarter of the current fiscal compared to Rs 1,555.49 crore a year ago, OIL said in a statement.

"The growth comes on the strength of a 5.3 percent growth in its crude oil production to 0.820 million tonnes in Q1 of FY24 vis-à-vis 0.729 million tonnes produced in Q1 of the last FY, coupled with lower operating costs," it said.

The firm got $76.85 for every barrel of crude oil produced, compared to the $112.73 a barrel price realisation last year.

The earnings before interest, taxes, depreciation, and amortisation (EBITDA) margin for the period ended June 30, 2023, increased to 53.49 percent compared to 44.76 percent in the year-ago period, an increase of 19.51 percent.

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A drop in prices meant that the turnover dropped to Rs 4,644.73 crore in Q1 against Rs 5,964 crore a year ago.

Shares of Oil India Ltd ended at Rs 277.60, up by Rs 5.15, or 1.89 percent on the BSE.

(Edited by : Shoma Bhattacharjee)

First Published:Sept 4, 2023 6:00 PM IST