ONGC’s March quarter results keep the energy low for the stock

Oil and Natural Gas Corporation (ONGC) share has so far fallen about 38% from its highs in January. As it turns out, the company’s March quarter results announced on Wednesday evening don’t inspire much confidence. True, revenues at ₹21456 crore, representing 20% year-on-year decline, were slightly ahead of Street estimates but net crude oil price realisations declined by almost 21% to $49.01 a barrel. Oil and gas volumes fell by 7.3% and 10.6%, respectively.

Profitability picture was dull though. An increase of 11% in other expenses weighed on profits, especially when other components of operating costs have declined. Earnings before interest, tax, depreciation and amortisation (Ebitda) declined by 30.6% to ₹8,588 crore. Further, other income declined sharply and there was also an impairment loss of about ₹4,900 crore. The upshot: ONGC reported a net loss of ₹3,098 crore for the March quarter.