Oil & Natural Gas Corp.'s standalone net profit may decline marginally in the third quarter as analysts expect that higher crude oil and gas sales can be offset by lower realisations.
The public sector undertaking's profit may fall 1.15% sequentially to Rs 10,098.8 crore in the quarter ended December, according to a consensus estimate of analysts tracked by Bloomberg. However, the operating margin is estimated to expand by 160 basis points.
ONGC Preview: Bloomberg Estimates (Standalone, QoQ)
Revenue may rise 0.5% to Rs 34,972.1 crore.
Ebitda may rise 2.8% to Rs 17,588 crore.
Margin may expand to 50.3% vs 48.7%.
Net profit may fall 1.15% to Rs 10,098.8 crore.
Here's What Brokerages Say
The Union government's unchanged tax rate for crude oil will maintain ONGC's net realisations at $73–76 per barrel, according to ICICI Securities. The revision in gas policy has reduced the administered-price mechanism gas prices from $8.57 to $6.5 per million British thermal units, impacting gas realisations.
Despite this, the brokerage said that slight improvements in oil & gas production and reduced operating expenses are expected to offset these effects. ICICI Securities projects a 3% quarter-on-quarter revenue growth and a 2% QoQ Ebitda increase in the third quarter. However, they expect a 4% QoQ decline in net profit due to decreased other income.
Kotak Securities expects a marginal Ebitda growth of 1% QoQ, attributing it to slightly higher crude oil and gas sales, countered by slightly reduced realisations.
The brokerage highlighted that the windfall tax on oil and a ceiling price on APM gas have restricted upstream realisations for ONGC. It expects crude oil production and sales to remain largely unchanged.
However, Kotak Securities predicts a 1% QoQ increase in gas production, driven by KG-D6 production and the ramp-up of MJ fields.
JM Financials estimates the net realisations and sales volume of crude oil and gas for the energy company to remain relatively unchanged from the previous quarter.
It expects ONGC's net crude realisation to be constrained within the range of $72–73 per barrel. It forecasts a marginal 0.1% increase in revenue and a 0.3% rise in Ebitda QoQ, while projecting a 7.3% decrease in net profit.
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