ONGC Q2 Results Review - Production Decline Continues, Other Income Boosts Earnings: Dolat Capital

Dolat Capital Report

Oil and Natural Gas Corporation Ltd.’s Ebitda/PAT came +10%/+28% above our estimates mainly due to sharp decline in survey cost and higher-than-expected other income, which constituted 32% to profit before tax. Additionally, a declared dividend of Rs 6/share implies yield of 2.3%.

Most of the incremental oil production from the KG-98/2 field, currently ~25 KBPD, will touch 40/45 KBPD by end of FY25. While incremental gas production, on the other hand, will touch 10 mmscmd from current level of 2.5 mmscmd.

We have tweaked FY25E/FY26E earnings estimates by 6%/12% mainly due to lower crude price assumption for FY26E and slight delay in Oil/Gas production ramp-up.

We are also introducing FY27E financials which will shift our valuation to Sept'26. Maintain ‘Accumulate’ Rating with revised SoTP-based target price of Rs 301 (Earlier Rs 328).

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