ONGC’s Sep quarter results won’t move the needle for its shares
State-run explorer Oil and Natural Gas Corp. Ltd’s (ONGC) standalone revenue fell almost 31% year-on-year in Q2, though it marked an improvement from the 51% y-o-y drop in the June quarter. Crude price realizations were better, increasing to $41.4 per barrel last quarter from $28.7 a barrel in the June quarter. However, note that realizations are still 31% down y-o-y.
ONGC’s standalone net profit of ₹2,877 crore includes the impact of an exceptional item worth about ₹1,240 crore pertaining to impairment loss. Pre-tax earnings before exceptional items stood at ₹5,228 crore, driven by higher-than-expected other income and lower interest expenses and depreciation costs.
“ONGC’s Q2FY21 results were well ahead of our expectations boosted by higher value-added-products sales volumes, higher realizations, reduction in other expenses and favourable movement in below-Ebitda items,” wrote analysts from Kotak Institutional Equities in a report on 18 November.
