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Lower crude oil prices point to downsides for ONGC
Business Standard
|August 15, 2025
ONGC's April-June quarter of 2025-26 (Q1FY26) results were disappointing, but the hopes of production growth down the line and ONGC Petro additions (OPaL) moving towards break-even could keep investors interested.
Standalone oil sales were down 3 per cent quarter-on-quarter (Q-o-Q), and gas was flat Q-o-Q while lower oil price realisation of $66.1 per barrel in Q1 vs $73.7 per barrel in Q4FY25 resulted in revenues of ₹32,000 crore, down 9 per cent Q-o-Q and slightly below consensus.
The operating profit of ₹18,660 crore, down 2 per cent Q-o-Q, was slightly better than consensus. Net profit stood at ₹8,020 crore, up 24 per cent Q-o-Q but below consensus. Interest rate and debt are both going down.
Analysts are assuming 4-5 per cent volume growth in oil and gas production in FY26. Apart from possible delays in production ramp-up, a key risk is decline in oil prices where every $5 per barrel change in oil price realisation will reduce consolidated earnings per share (EPS) by 8-9 per cent.
This story is from the August 15, 2025 edition of Business Standard.
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