Crude oil price drop may lead to earnings downgrade for ONGC

ONGC's revenue for the fourth quarter of 2024-25 (Q4FY25) came in above estimates as crude oil and gas sales were higher than consensus.

- DEVANGSHU DATTA

The revenue came in at ₹35,000 crore on the back of higher crude and gas sales and steady value-added product sales. Oil realisation averaged $73.7 per barrel, a $3.1 per barrel discount to Brent.

Crude production was flat quarter-on-quarter (Q-o-Q) and flat year-on-year (Y-o-Y), while gas production was flat Q-o-Q but down 6 per cent Y-o-Y. The Ebitdax (Earnings before interest, depreciation, amortisation, and exploration) was at ₹19,000 crore (up 9 per cent Y-o-Y), while net profit of ₹26,450 crore was 22 per cent down Y-o-Y due to dry well write-offs, and survey costs, along with lower other income. There was a forex gain of ₹13 crore as well. In FY25, ONGC's net sales were flat Y-o-Y and operating profit was flat Y-o-Y but net profit was down 11 per cent Y-o-Y. The board recommended a final dividend of ₹1.25 per share (total dividend for FY25 at ₹12.25 per share).

ONGC dug a record 109 exploratory and 469 development wells in FY25. It will incur a capex of ₹30,000-35,000 crore in FY26. In FY25, ₹10,300 crore was spent on exploration and production.