ONGC Q1 Results Highlights: Net Profit Drops by 42.8% to ₹10,236 Cr

Oil and Natural Gas Corporation (ONGC) reported a 42.8% drop in consolidated net profit, amounting to ₹10,236 crore in the first quarter of the financial year 2024-25. Sequentially, ONGC's consolidated net profit decreased by 11%.

ONGC Q1 Results Highlights

Oil and Natural Gas Corporation (ONGC) reported a 42.8% drop in consolidated net profit, amounting to ₹10,236 crore in the first quarter of the financial year 2024-25, compared to ₹17,893 crore in the same period the previous year.

Sequentially, ONGC's consolidated net profit decreased by 11%, falling from ₹11,526.53 crore in the March quarter to the quarter ended June 30.

The state-owned oil and gas exploration giant saw a 1.7% increase in revenue from operations for the quarter, reaching ₹1.66 lakh crore, up from ₹1.63 lakh crore in the same period last year.

ONGC’s earnings before interest, tax, depreciation, and amortization (EBITDA) for Q1 increased to ₹18,617.5 crore.

The crude oil price realization from ONGC’s nominated fields was $83.05 per barrel in Q1, compared to $76.36 per barrel in the same period last year.

During the first quarter, the company’s total crude oil production declined by 1.4% from last year, amounting to 5.237 million metric tonnes (MMT). ONGC's total gas production in Q1 fell by 4.1% to 5.008 billion cubic meters (BCM) from the previous year, according to the company's press release.

Impact on ONGC Share Price Post Q1 Results

Following the announcement, the share price of Oil and Natural Gas Corporation (ONGC) opened nearly 4% higher on Tuesday following the announcement of its Q1 results after market hours on Monday.

Starting at ₹314.80, over 1% above the previous close of ₹310.25, ONGC share price continued to rise during Tuesday morning trades on the NSE, reaching an intraday high of ₹322.45, marking an approximate gain of 4% (3.93%). ONGC was also one of the leading gainers among Nifty-50 stocks.

Jefferies India Pvt Ltd analysts noted that Q1 standalone Earnings before interest, tax, depreciation, and amortization (Ebitda) stood at ₹18,617 crore, 3% above their estimates. Domestic production was broadly in line, with a 2% sequential decline, while realizations were slightly better than expected.

Motilal Oswal Financial Services analysts also stated that the Ebitda met their estimates. According to the company release, the net crude price realizations were $83.1 per barrel, an 8.8% year-on-year increase (10.4% higher in rupee terms).

Despite the decline in net profit, Jefferies indicated that it was in line with estimates and consensus, offset by higher depreciation, amortization, and interest expenses. Lower other income and write-offs related to dry wells also contributed to the drop in reported net profit.

Analysts remain generally optimistic about ONGC's prospects, supported by expected production increases, strong oil realizations, and rising gas prices for its domestic output. However, many analysts will reassess their ratings after the upcoming analyst call. Key areas to watch, according to analysts, include production growth guidance, especially from the KG basin, government directives, premium price realization from new wells in nomination fields, and capex outlook.

Currently, Jefferies has set a target price of ₹390 for ONGC, suggesting more than a 20% upside. Motilal Oswal Financial Services also maintains a Buy rating for the stock.

About Oil and Natural Gas Corp Ltd

Oil and Natural Gas Corp Ltd (ONGC) is a comprehensive energy company involved in the entire hydrocarbon value chain. The company engages in the discovery, production, refining, and marketing of oil and gas, and also produces petrochemicals. Additionally, ONGC is active in power generation and has significant renewable energy operations.

ONGC's refining activities are conducted through Mangalore Refinery and Petrochemicals Ltd and Hindustan Petroleum Corporation Ltd. It supplies products to oil refining and gas marketing companies. Furthermore, the company operates internationally through its subsidiary, ONGC Videsh Ltd (OVL), with a presence in Latin America, the Middle East and Africa, Asia-Pacific, and Europe. ONGC is headquartered in New Delhi, India.