ONGC Shares in Focus After Q4 Consol Profit Slumped 27% YoY

Shares of Oil & Natural Gas Corporation are set to take center stage today, as investor sentiment is likely to dim following the oil giant’s fourth straight quarterly drop in consolidated net profit. The state-owned oil company’s consolidated net attributable to shareholders dropped 27% on year during the March quarter. While the stock opened higher today, it later turned crimson. At 09:29 AM, shares were trading over 1% below previous close.

On a standalone basis too, the company missed the Street’s view and posted a near 35% drop in net earnings, even though its revenue saw a marginal uptick from the figure recorded in the corresponding quarter a year ago. Increased depreciation and related costs along with a sharp surge in exploratory costs weighed on the upstream company’s standalone earnings for the quarter under review.

An over five-fold surge in exploratory costs completely offset the 25% decline in statutory levies. Adding to the strain on ONGC’s earnings this quarter was a steep over 43% year-on-year decline in other income, further compounding the overall pressure on its performance.

On a sequential basis as well, the company's performance mirrored the year-on-year trend, with net profit declining even as revenue registered an uptick. Its standalone net fell 22% sequentially, while its revenue rose nearly 4% from the December quarter figure.

Net realisation for crude oil from nominated fields fell 9% on year during the fourth quarter of FY25, while that from joint venture fields slipped over 3% from the same quarter a year ago. ONGC said it had produced 18.558 MMT of crude oil on a standalone basis during FY25, marking a 0.9% increase over FY24 output. However, its standalone production of natural gas production slipped 1.6% to 19.654 BCM in FY25.

The upstream firm has invested nearly Rs 62,000 crore as capital expenditure in FY25, which includes Rs 18,365 crore in OPaL and Rs 4,600 crore in ONGC Green for acquisition of PTC Energy and Ayana Renewables. The said FY25 capex is over 65% higher than the capex spent a year ago.

Jefferies has ‘buy’ call on the stock and has pegged Rs 375 per share as the target price. This implies a near 51% upside over the stock’s Wednesday close on the NSE. The stock has gained 4% in 2025 so far.