Shares of Cairn India fell nearly 4 per cent to an intraday low of Rs 235.50 on Thursday after the company said it will cut its capital expenditure by about 60 per cent for the fiscal year starting April 1.
Cairn India, a unit of London-listed Vedanta Resources Plc has revised its capital expenditure for FY16 from a projected $1.2 billion to $500 million as falling oil prices hurt profitability and make projects economically unviable, the company said in a release to exchanges.
Cairn India will undertake projects that are economically viable at current oil prices, the company said.
Analysts say this capex cut is higher than the capex cut of 30-40 per cent seen by global peers.
With this capex cut it will be difficult for the company to meet its 7-10 per cent CAGR in production guidance, analysts say.
Analysts believe its FY17 estimated production is likely to be flat.
Shares in Cairn India closed 2.1 per cent lower at Rs 239 apiece, underperforming the broader Nifty, which closed with 0.17 per cent gains.
(With inputs from Reuters)
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