Moody affirms Baa1 rating for ONGC with stable outlook

Thanks to higher net oil price realisation, which has improved the credit metrics of ONGC, ratings agency Moody’s on Tuesday affirmed its ‘Baa1’ ratings for the oil explorer with a stable outlook. “Moody’s Investors Service has affirmed Oil and Natural Gas Corporation’s ‘Baa1’ local and foreign currency issuer ratings, and the ‘Baa1’ ratings on the senior unsecured bonds guaranteed by ONGC and issued by ONGC Videsh and ONGC Videsh Vankorneft,” said the agency.

The company’s debt metrics, as measured by retained cash flow (RCF) to net debt, has improved in the last 12 months from 40% in FY18 to 51% in FY19. Higher crude oil realisation led to better earnings in FY19 for ONGC. The company’s net profit in FY19 jumped 34% to Rs 26,716 crore. The net realisation improved 24% to $68.19 per barrel in FY19 compared with $55.19 per barrel in FY18.