Essar Energy margins leap in UK and India Improving margins at refineries in India and the UK helped boost profit forecasts at Essar Energy. The FTSE 250 refining and power generation group raised margins at its expanded Vadinar refinery in Gujarat from $2.82 to $9.75 a barrel year-on-year. The improvement was based on strong demand for fuels from its plants there that are designed to handle heavy and ultra-heavy crude oil. Throughput there almost doubled to 5.1m tonnes in the quarter to December. Meanwhile the heavily indebted company that is three-quarters owned by founders Ravi Ruia and his brother Shashi Ruia of India's Essar conglomerate, also managed to raise margins at its Stanlow refinery in Cheshire. Margins at the UK's second-largest refinery, purchased for $350m amid a downturn in the European sector from Royal Dutch Shell in 2010, rose from $2.45 to $5.59 a barrel. The boost in margins at Stanlow, in part achieved through a switch to gas-fuelled processing and an abandonment of lubricant production, comes as further pressure in the European market prompted Shell to announce two weeks ago that it would abandon fuel production at its Hamburg-Harburg refinery in north Germany from March. That closure follows the abandonment of refining at Coryton in Essex after the collapse of its owner Petroplus, which bought the complex from BP in 2007. Analysts are forecasting earnings before interest, tax, depreciation and amortisation to reach $1.12bn in the full year to March on turnover approaching $26bn. Of that, its Indian refining business is expected to contribute nearly $600m of ebitda, its UK refining business nearly $250m, and its Indian power generation business nearly $300m. But investor attention is centred on attempts to rein in debt after several years of high capital expenditure. Net debt at the end of December was $6.7bn. Shares in the former FTSE 100 constituent, which floated in London in May 2010 at 420p raising nearly £1.3bn, rose 2.3 per cent to 144.3p on Monday.