ONGC Q2 Standalone Net Profit Surges 57% to Rs 15,489 Crore Despite Production Slump
State-owned upstream major Oil and Natural Gas Corporation (ONGC) reported a 57.3 percent year-on-year increase in standalone net profit for the second quarter (July–September). Net profit climbed to Rs 15,489 crore, up from Rs 9,848 crore in the corresponding period of the previous fiscal year, as higher crude oil and natural gas prices offset persistent declines in domestic output.
Standalone revenue from operations advanced 32.8 percent year-on-year to Rs 43,875 crore compared with Rs 33,031 crore in the year-ago period. Sequentially, however, standalone net profit moderated by 9.1 percent from the Rs 17,034 crore recorded in the April–June quarter, while revenue dipped 5.6 percent quarter-on-quarter from Rs 46,460 crore.
Realisations Lift Operating Metrics
The substantial year-on-year profitability increase was driven almost entirely by stronger realisations:
- ONGC fetched an average of $92.33 per barrel for crude oil produced from nominated blocks, marking a 37.1 percent surge compared to $67.34 per barrel during the corresponding quarter of the previous year.
- In rupee terms, nominated crude realisations climbed 50.2 percent to Rs 8,826 per barrel against Rs 5,876 per barrel, aided by currency movements.
- Joint venture crude realisations rose 41.9 percent year-on-year to $97.02 per barrel from $68.35 per barrel.
- Nomination gas prices were established at $7 per million British thermal units (mmBtu), up from $6.75 per mmBtu a year earlier, while new-well gas realisations climbed to $10.24 per mmBtu from $8.36 per mmBtu.
Operating margins on a standalone basis improved to 47.52 percent from 41.34 percent a year earlier, even as statutory levies climbed 30.2 percent to Rs 8,426 crore. The offshore segment served as the primary growth engine, with revenue increasing 35.1 percent to Rs 30,936 crore.
Operational Hurdles Weigh on Extraction
The financial expansion took place against a challenging operational backdrop, as production figures fell across all reported categories:
- Standalone crude oil production dropped 4.2 percent year-on-year to 4.437 million metric tonnes (MMT) compared to 4.630 MMT.
- Standalone natural gas production declined 1.6 percent to 4.839 billion cubic metres (BCM) from 4.918 BCM.
- Total standalone oil and oil-equivalent gas output slipped 2.9 percent to 9.515 MMT from 9.802 MMT.
- Joint venture output registered sharper contractions, with crude output dropping 20.8 percent to 0.244 MMT and gas extraction falling 23.7 percent to 0.087 BCM.
ONGC attributed the output decline to complex reservoir conditions at its deepwater KG-DWN-98/2 asset in the Krishna-Godavari basin, adverse monsoon-related operational delays affecting its Pipeline Replacement Projects (PRP-8 and PRP-9), and lower customer offtake in select onshore fields.
Record Dividend Payout and Consolidated Performance
Rewarding equity investors, the board declared a first interim dividend of 160 percent, or Rs 8 per share on a face value of Rs 5. The total interim dividend payout stands at Rs 10,064 crore, marking the largest single-instalment interim dividend distributed by the upstream Maharatna.
On a consolidated basis—which incorporates subsidiaries including Hindustan Petroleum Corporation Limited (HPCL) and Mangalore Refinery and Petrochemicals Limited (MRPL)—net profit rose 46.9 percent year-on-year to Rs 18,535 crore, while profit attributable to owners of the parent grew 55.3 percent to Rs 16,744 crore on revenue of Rs 1,98,263 crore. For the first half of the financial year (H1), standalone net profit rose 82 percent to a record Rs 32,522 crore, nearly matching the profit recorded across the entire preceding financial year.
