ONGC Q4 Preview: Operating profit likely to rise QoQ on firm crude prices, rupee depreciation

Net profit is projected to decline 12.4 percent YoY to Rs 8,646.20 crore, although it is expected to rise around 5 percent sequentially.

State run Oil & Natural Gas Corporation (ONGC) is set to announce its March quarter earnings on May 21. Operating profit is expected to improve marginally, driven by firmer crude oil prices, rupee depreciation, and higher realizations from administered pricing mechanism (APM) gas. However, a slight decline in production may cap overall operating profit growth, analysts expect.

As per a Moneycontrol poll of eight analysts, ONGC’s revenue is estimated at Rs 32,769 crore, down 5.4 percent year-on-year (YoY) and 2.8 percent quarter-on-quarter (QoQ). Net profit is projected to decline 12.4 percent YoY to Rs 8,646.20 crore, although it is expected to rise around 5 percent sequentially. EBITDA is likely to be Rs 18,307.90 crore, reflecting a 15.2 percent YoY increase and a 7.4 percent QoQ growth.

Crude oil and natural gas production are estimated at 5.1 million metric tonnes (MMT) and 55 million metric standard cubic meters per day (MMSCMD), respectively. This compares with 5.36 MMT and 56 MMSCMD in Q4 FY24, and 5.24 MMT and 55.5 MMSCMD in Q3 FY25. Net crude oil realization is expected at around $74.9 per barrel, lower than $80.8 per barrel in Q4 FY24 but slightly higher than USD 72.6 per barrel in Q3 FY25. The impact of Special Additional Excise Duty (SAED) is estimated to be nil, compared to USD 6 per barrel in Q4 FY24.

What factors could drive the earnings?

EBITDA Impact: Analysts anticipate a 1–3 percent quarter-on-quarter (QoQ) decline in oil and gas production, primarily due to lower output from Nomination fields. However, this is likely to be partially offset by a 10–15 percent QoQ increase in production from the Krishna-Godavari (KG) basin. While the overall production is expected to moderate, the depreciation of the rupee could cushion the impact, helping stabilize ONGC’s EBITDA.

Volume Pressure: Crude oil sales volumes are projected at 4.58 million metric tonnes (MMT), a decline of 2 percent both year-on-year (YoY) and QoQ. Natural gas sales volumes are expected at 3.8 billion cubic meters (BCM), down 1 percent YoY and 4 percent QoQ. This weakness in volumes is likely to weigh on topline performance.

Realization Trends: Gross crude oil price realization is expected at approximately $74 per barrel, representing an 8 percent YoY decline but a 2 percent QoQ improvement. Net oil price realization is projected at $54.3 per barrel, up 4 percent YoY and 2 percent QoQ. Analysts also forecast a net crude oil realization of $74.1 per barrel and an APM gas price realization of $6.5 per million British thermal units (MMBtu). Crude oil volumes are expected to decline by 4.1 percent YoY and 1.8 percent QoQ, while gas volumes may fall 2.6 percent YoY and 2.8 percent QoQ.

What to look out for in the quarterly show?

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.