Oil India’s Q2 disappointed, but downside may be limited too

Oil India’s (OIL’s) numbers for the July-September quarter (Q2) of FY26 were disappointing with weak volumes, high operating expenditure (opex) and high write offs for dry wells as well as downgraded guidance for future production.

- DEVANGSHU DATTA

Adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) were down 18 per cent year-on-year (Yo-Y) due to low oil and gas volumes, low realisations and high opex.

Exploration write offs amounted to ₹980 crore. Revenues include one-off gains from crude-pumping revision and cuts in production guidance.

Adjusted for one-offs, revenues were down 6 per cent Yo-Y. Standalone profit after tax (PAT) was also well below consensus and down 43 per cent. Oil production at 848,000 tonnes was down 3.1 per cent while gas production, up 3 per cent, was in line. The net oil realisation, at $65.8 per barrel (bbl), was down 7 per cent and well below ONGC’s while gas realisations, at $6.5 per million British thermal units (mmbtu), were flat and also about 7 per cent below ONGC’s $7.1/mmbtu.