State-run energy flagship Oil and Natural Gas Corporation Ltd. closed Muhurat trade up 2.09% at ₹234.80, setting up a decisive session for energy desks tracking an earnings print that lagged street expectations.
Soil earnings slumped. Standalone net profit for the September quarter contracted 9.1% sequentially to ₹15,489 crore, sliding from ₹17,034 crore in the June quarter. The bottom line trailed consensus analyst estimates of ₹15,591 crore, weighed down by higher impairment charges and an unexpected one-off provision. Revenue from operations fell 5.6% quarter-on-quarter to ₹43,875 crore against estimates of ₹44,257 crore. Operating leverage deteriorated simultaneously—earnings before interest, tax, depreciation, and amortisation (EBITDA) dropped 12.3% to ₹24,860 crore, while EBITDA margin narrowed 400 basis points to 57%.
| Metric | Q2 FY27 | Q1 FY27 | Consensus Estimate | Sequential Change |
|---|---|---|---|---|
| Standalone Net Profit | ₹15,489 cr | ₹17,034 cr | ₹15,591 cr | -9.1% |
| Revenue from Operations | ₹43,875 cr | ₹46,461 cr | ₹44,257 cr | -5.6% |
| EBITDA | ₹24,860 cr | ₹28,355 cr | ₹26,574 cr | -12.3% |
| EBITDA Margin | 57.0% | 61.0% | 60.0% | -400 bps |
But institutional brokerages brushed aside the quarterly miss. Global brokerage firm CLSA maintained its 'High Conviction Outperform' rating on ONGC with an unchanged target price of ₹405 per share, pointing to an implied 72% upside from the current market price. While standalone net profit lagged the brokerage's forecast by 5% due to asset impairments, core performance told a sharper story. EBITDA and core profit before tax outstripped CLSA's internal forecasts by 7% and 4%, respectively.
Physical output is turning a corner. Production volumes across FY27 and FY28 are set to expand as deepwater output ramps up from the KG-98/2 block in the Krishna Godavari basin alongside the Daman Upside development. Meanwhile, technical collaboration with BP on a specialized service contract has already begun pumping incremental gas output from the ageing Mumbai High reservoir.
The equity market is mispricing crude cash flows. According to CLSA's valuation model, the stock's current quote discounts a Brent crude environment of barely $55 per barrel. If global benchmark crude averages $82 per barrel over the forecast cycle, the implied upside stretches to 76%. To cushion long-term holders while the production curve accelerates, the ONGC board declared an interim dividend of ₹8 per share, locking in an annualized cash yield of roughly 3.5% at current trading levels.