ONGC’s March-Quarter Profit Plunges 35% On Lower Realisations, Higher Costs

Oil and Natural Gas Corp. Ltd. posted a sharp fall in its March-quarter earnings as lower crude price realisations and flat output offset a marginal rise in revenue, while higher expenses weighed on margins. This was ONGC’s weakest quarterly profit since June 2023.

The state-owned oil major’s net profit dropped 35% on year to ₹64.48 billion, well below analysts’ estimate of ₹85.83 billion. Revenue rose just 1% to ₹349.82 billion from a year ago, marking the slowest year-on-year top-line growth since the December 2015 quarter.

Despite this, revenue beat the Street’s forecast of ₹336.96 billion. Other income fell 43% on year to ₹20.75 billion.

For 2024-25, ONGC’s net profit declined over 12% to ₹356.10 billion, while revenue slipped marginally to ₹1.378 trillion from ₹1.384 trillion in 2023-24.

Standalone crude oil output was nearly flat in January–March at 4.70 million tonnes versus 4.71 million tonnes a year earlier. However, crude production for 2024-25 rose marginally to 18.56 million tonnes from 18.40 million tonnes.

Realisation from nominated fields dropped 8.8% on year to $73.72 per barrel in January–March In rupee terms, the realisation was down 4.8% at ₹6,385 per barrel. For 2024-25, crude realisation fell 4.8% on year to $76.90 per barrel, or 2.8% lower at ₹6,503 per barrel in rupee terms.

Crude oil production from joint ventures declined nearly 20% on year to 300,000 tonnes, while price realisations fell 3.4% to $74.19 per barrel. In rupee terms, however, they inched up 1% to ₹6,427 per barrel.

Natural gas output dipped to 4.89 billion cubic metres in the March quarter from 4.95 bcm a year ago. 2024-25 production also fell 1.6% on year to 19.65 bcm. Joint venture gas output dropped to 120 million cubic metres from 151 million cubic metres. The government-fixed gas price remained unchanged at $6.5 per mmBtu during the March quarter.

Offshore operations generated ₹247.83 billion in revenue, up nearly 4% and accounting for 71% of total revenue. Revenue from onshore operations declined over 5% to ₹101 billion.

The company’s operating margin narrowed to 28.46% in January–March from 40.12% a year ago. 2024-25 operating margin was 37.26%, down from 41.25% in 2023-24.

Total expenditure jumped 11% on year to ₹282.89 billion. Material consumption rose 18% to ₹11.19 billion, while exploration costs written off more than tripled to ₹50.47 billion. Statutory levies fell over 25% to ₹67.35 billion.

ONGC invested ₹620 billion in capex during 2024-25, significantly higher than ₹374.94 billion in 2023-24. This included ₹183.65 billion in ONGC Petro Additions Ltd. and ₹46 billion in ONGC Green Ltd. for acquisitions of PTC Energy and Ayana Renewables.

The board declared a final dividend of ₹1.25 per share for 2024-25 and approved a ₹200 billion corporate guarantee to ONGC Petro Additions for debt refinancing.