Oil and Natural Gas Corporation Limited (ONGC) released its second-quarter financial results for the fiscal year 2024-25 on November 11, 2024. The company reported a 25% decline in net profit, amounting to ₹10,272.5 crores, compared to ₹13,703.38 crores in the same quarter last year.
Key Financial Highlights of ONGC Q2
Despite the drop in net profit, ONGC experienced a 7.25% increase in revenue from core operations, reaching ₹1,58,329.10 crores, up from ₹1,47,613.68 crores a year ago. However, rising expenses overshadowed this growth.
- Net Profit: ₹10,272.5 crores (down 25% YoY)
- Revenue from Operations: ₹1,58,329.10 crores (up 7.25% YoY)
- Total Expenses: ₹1,49,780.26 crores (up 15.34% YoY)
The increase in expenses was primarily driven by higher costs of materials consumed by the company.
Revenue Growth in Oil Refining and Marketing
ONGC’s primary source of revenue comes from its oil refining and marketing segment, which reported a notable 9.2% increase in revenue for the July to September quarter:
- Oil Refining and Marketing Revenue: ₹1,37,127.09 crores (up from ₹1,25,568.88 crores)
This growth is attributed to increased crude oil production and effective management of operational costs.
Dividend Announcement by ONGC
In light of its financial performance for Q2 FY24-25, ONGC’s Board of Directors declared an interim dividend of ₹6 per equity share. The record date for determining shareholder eligibility for the dividend payment is set for November 20, 2024.
Market Reaction to ONGC’s Q2 Results
Following the announcement of its quarterly results, ONGC shares closed down by 2.08%, ending at ₹256.90, compared to the previous close of ₹262.35. This decline reflects market reactions to the company’s profit drop despite revenue growth.
Production Insights: Crude Oil and Natural Gas
ONGC has successfully reversed a declining trend in crude oil production while ramping up natural gas output:
- Crude Oil Production: 4.576 million metric tonnes (MMT), reflecting a 0.7% rise compared to the previous year.
- The decline in natural gas production was reduced from 3.6% in Q1 FY25 to 2.1% in Q2 FY25 compared to the same quarter last year.
- The company produced more natural gas in September 2024 than in September of the previous year.
Conclusion: ONGC’s Outlook Amidst Challenges
While ONGC faced challenges reflected in its net profit decline for Q2 FY24-25, the company demonstrated resilience with increased revenues and production levels. The declaration of an interim dividend signals confidence in future performance despite current market pressures. Disclaimer: Financial figures are based on estimates and reports from various sources and may not reflect actual earnings.
