ONGC Q1 Preview: Profit set to fall QoQ on lower crude realisation, softer sales volumes

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Oil and gas major ONGC is expected to post a sequential decline in the net profit for the June quarter, weighed down by lower crude realisation and reduced sales volumes, partially cushioned by marginally higher gas realisation.

Estimates from seven brokerages polled by Moneycontrol show that the quarterly revenue is projected at Rs 34,982 crore, a fall of over 10 percent both year-on-year and quarter-on-quarter basis. The net profit is seen at Rs 7,558.90 crore, down 15.4 percent QoQ due to weaker oil realisations, but up 17% YoY. The EBITDA for ONGC is expected to remain flat sequentially at Rs 17,063.30 crore, while rising 22 percent on a YoY basis.

Factors At Play

EBITDA impact: Sequentially flat EBITDA is attributed to a 2-3 percent QoQ decline in crude sales volumes and a 1.5 percent QoQ dip in gas sales volumes.

Realisation trends: Brokerages assume net crude realisation at $66.1/bbl (vs $73.0/bbl in Q4FY25), aligned with Brent prices, while domestic APM gas realisations are expected to improve to $6.6/mmbtu in Q1FY26 (vs $6.5/mmbtu in Q4FY25), aided by the gradual reclassification of APM gas to New Well Gas (NWG) fetching $8/mmbtu. Overall crude sales volumes are estimated to fall 2.9 percent QoQ, with gas sales volumes down 1.5 percent QoQ.

Volume: Crude production is likely to decline 5 percent YoY and QoQ, and gas production may fall 6 percent both YoY and QoQ. Benchmark crude prices are expected to average $67/bbl, down 22 percent YoY and 11 percent QoQ, while APM gas prices are capped at $6.75/mmbtu for the quarter, up from $6.5/mmbtu in Q4FY25.

What to Look Out For

Investors are expected to closely track ONGC’s production figures, particularly any recovery or growth from the KG basin, as well as updates on new business developments or exploration initiatives that could support future earnings.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.