ONGC Shares Rise Despite Profit Decline; Company Declares Interim Dividend
ONGC's shares gained 2.5% to Rs 255 despite reporting an 18% drop in quarterly profit to Rs 9,848 crore. Revenue decreased by 2.5% to Rs 33,031 crore. The company declared an interim dividend of Rs 6 per share. Crude oil realization fell 14% to $67.34 per barrel, while natural gas price realization increased 3.8% to $6.75 per mmbtu. ONGC plans annual capex of Rs 30,000-35,000 crore, targets Rs 5,000 crore in cost reduction, and aims to expand renewable energy capacity to 10 GW by 2030. Analysts have mixed views, with Goldman Sachs maintaining a 'Sell' rating and Nomura keeping a 'Neutral' stance.
*this image is generated using AI for illustrative purposes only.
Oil & Natural Gas Corporation (ONGC), India's state-owned oil exploration and production giant, saw its shares gain 2.5% to Rs 255 despite reporting a decline in quarterly profit. The company's financial results and strategic plans have drawn mixed reactions from analysts.
Financial Performance
ONGC reported a significant drop in its quarterly profit, primarily due to lower oil prices. Here's a breakdown of the key financial metrics:
| Metric | Current Quarter | Change |
|---|---|---|
| Net Profit | Rs 9,848.00 crore | -18.00% |
| Revenue | Rs 33,031.00 crore | -2.50% |
| Crude Oil Realization | $67.34 per barrel | -14.00% |
| Natural Gas Price Realization (Nominated Fields) | $6.75 per mmbtu | +3.80% |
Despite the profit decline, ONGC has declared an interim dividend of Rs 6.00 per equity share, amounting to a total payout of Rs 7,548.00 crore.
Analyst Perspectives
The company's performance and future outlook have elicited varied responses from market analysts:
Goldman Sachs: Maintained a 'Sell' rating with a target price of Rs 220.00.
- Cut EBITDA estimates by 13%.
- Modeled a conservative 2% growth against ONGC's guided 5% CAGR for oil and gas production.
Nomura: Maintained a 'Neutral' rating but reduced the target price to Rs 270.00 from Rs 275.00.
- Lowered consolidated EPS estimates by 14% and 7% for the next two fiscal years.
Strategic Plans
ONGC's management has outlined several key initiatives for the future:
- Annual capital expenditure of Rs 30,000.00-35,000.00 crore.
- Cost reduction target of Rs 5,000.00 crore.
- Expansion of renewable energy capacity to 10 GW by 2030.
These plans indicate ONGC's focus on balancing traditional oil and gas operations with a growing emphasis on renewable energy sources.
Investor Relations
In a recent corporate filing, ONGC announced that the audio recording of its conference call with analysts and investors has been made available on the company's website. This move aligns with ONGC's commitment to transparency and compliance with SEBI regulations.
While ONGC faces challenges from fluctuating oil prices and changing energy landscapes, its strategic initiatives and dividend declaration suggest a balanced approach to maintaining shareholder value while preparing for future energy transitions.
Historical Stock Returns for Oil & Natural Gas Corporation
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -1.30% | -1.82% | +1.19% | +0.65% | -1.28% | +240.81% |
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