New Delhi: Oil and Natural Gas Corporation (ONGC) reported a 57.3 percent rise in standalone net profit for the second quarter of FY2026-27 (Q2 FY27). Profit reached Rs 15,489 crore in the July-September quarter, up from Rs 9,848 crore a year earlier, according to the results the company announced on Thursday. The growth came on stronger prices rather than higher volumes. ONGC’s oil and oil-equivalent gas output fell 2.9 percent year-on-year to 9.515 million metric tonnes (MMT) in the quarter.
The year-on-year jump also masked a sequential decline. Standalone net profit was 9.1 percent lower than the Rs 17,034-crore ONGC earned in the April-June quarter (Q1 FY27). For the first half of the year (H1 FY27), standalone net profit rose 82 percent to Rs 32,522 crore from Rs 17,872 crore, which ONGC said was its highest-ever half-yearly profit.
Standalone revenue from operations rose 32.8 percent year-on-year to Rs 43,875 crore in Q2, from Rs 33,031 crore. Prices did the work. ONGC realised USD 92.33 a barrel on crude oil from its nominated fields in Q2, according to its statement, up 37.1 percent from USD 67.34 a barrel a year earlier. In rupee terms, the realisation rose 50.2 percent to Rs 8,826 a barrel from Rs 5,876. Crude from joint venture (JV) fields fetched USD 97.02 a barrel, up 41.9 percent from USD 68.35.
Gas prices rose too, though by less. The price for nomination gas was USD 7 per million British thermal units (mmBtu) in Q2, against USD 6.75 a year earlier. Gas from new wells fetched USD 10.24 per mmBtu, up 22.5 percent from USD 8.36. The statement said revenue from new well gas stood at Rs 7,050 crore in H1, and contributed more than 34 percent of revenue from ONGC’s nomination gas portfolio.
Higher prices also pushed up what ONGC paid in levies. Statutory levies rose 30.2 percent year-on-year to Rs 8,426 crore in Q2. Even so, margins widened. ONGC reported a standalone operating margin of 47.52 percent for the quarter, up from 41.34 percent a year earlier. Its net profit margin rose to 35.30 percent from 29.81 percent.
The offshore business carried most of the gains. Offshore revenue rose 35.1 percent year-on-year to Rs 30,936 crore, and the segment’s result before tax and interest climbed 43.6 percent to Rs 13,150 crore. Onshore revenue rose 27.7 percent to Rs 12,939 crore. The onshore segment result more than doubled, rising 109.3 percent to Rs 4,222 crore from Rs 2,017 crore.
The quarter-on-quarter picture was weaker. Standalone revenue from operations slipped 5.6 percent from Rs 46,460 crore in Q1. Total expenses rose 12.2 percent to Rs 28,570 crore over the same period.
Depreciation, depletion, amortisation and impairment drove much of that increase. The charge rose 34.9 percent to Rs 8,476 crore from Rs 6,283 crore in Q1. Exploratory well costs written off rose to Rs 1,291 crore from Rs 897 crore. Other expenses climbed 14.9 percent to Rs 7,419 crore.
The combined effect showed up in the offshore segment. Its result fell 31.4 percent quarter-on-quarter to Rs 13,150 crore from Rs 19,183 crore, and its revenue fell 7.2 percent. The onshore segment result, by contrast, rose 7.3 percent to Rs 4,222 crore.
Other income limited the damage. It more than doubled to Rs 4,466 crore from Rs 1,861 crore in Q1. As a result, standalone pre-tax profit fell 13.5 percent to Rs 19,772 crore. A deferred tax credit of Rs 1,228 crore then brought total tax down to Rs 4,283 crore from Rs 5,814 crore. That narrowed the fall in net profit to 9.1 percent. The standalone operating margin eased to 47.52 percent from 51.51 percent in Q1.
At group level, the quarter looked stronger, but the half-year did not. Consolidated net profit rose 46.9 percent year-on-year to Rs 18,535 crore in Q2, from Rs 12,615 crore. Profit attributable to ONGC’s shareholders rose 55.3 percent to Rs 16,744 crore. Consolidated revenue from operations rose 25.6 percent to Rs 1,98,263 crore.
For H1, though, consolidated net profit rose only 3.8 percent, to Rs 25,089 crore from Rs 24,169 crore. Standalone profit had grown 82 percent over the same period. The gap traces back to Q1, when consolidated net profit was just Rs 6,554 crore.
The group’s refining and marketing segment accounts for most of that swing. The group consolidates refiners Hindustan Petroleum Corporation Limited (HPCL) and Mangalore Refinery and Petrochemicals Limited (MRPL) as subsidiaries. According to the segment results, refining and marketing posted a loss of Rs 16,155 crore before tax and interest in Q1. It returned to a profit of Rs 9,807 crore in Q2, against Rs 6,526 crore a year earlier. For H1, the segment showed a loss of Rs 6,348 crore, against a profit of Rs 12,458 crore in H1 FY26.
Minority shareholders in group subsidiaries absorbed part of those Q1 losses. Non-controlling interests carried a loss of Rs 5,344 crore in Q1, and Rs 3,553 crore for the half-year. This is why profit attributable to ONGC’s own shareholders rose 39.1 percent in H1, to Rs 28,642 crore, while total consolidated profit grew only 3.8 percent.
The sequential improvement in Q2 was sharp. Consolidated net profit rose 182.8 percent from Q1. The consolidated operating margin recovered to 15.44 percent from 4.58 percent in Q1, and stood above the 13.11 percent of Q2 FY26.
The group’s other segments were mixed. Petrochemicals posted a Q2 loss of Rs 241 crore, wider than the Rs 173 crore loss a year earlier, even as the segment’s revenue rose 66.6 percent to Rs 5,655 crore. Exploration and production outside India, the business of ONGC Videsh Limited (OVL), grew revenue 46.5 percent to Rs 3,169 crore. Its segment result, however, fell 27.8 percent to Rs 423 crore. The consolidated results also included a credit loss of Rs 1,497 crore charged in H1. The charge relates to dividends, loans and interest receivable from Petrolera IndoVenezolana SA (PIVSA), a Venezuelan associate of the group. The results said this was based on management’s estimate and remains subject to further developments in the project.
Production fell year-on-year in every category the company reported. ONGC’s standalone crude oil output declined 4.2 percent in Q2 to 4.437 MMT from 4.630 MMT. Its standalone gas output fell 1.6 percent to 4.839 billion cubic metres (BCM) from 4.918 BCM. Condensate production slipped 5.9 percent to 0.239 MMT.
The steepest falls came from joint venture fields operated by others. ONGC’s share of crude from those fields dropped 20.8 percent to 0.244 MMT, and its share of gas fell 23.7 percent to 0.087 BCM.
The half-year showed the same trend. Standalone oil and oil-equivalent gas output fell 3.2 percent in H1 to 18.960 MMT from 19.581 MMT. Standalone crude output declined 4.6 percent to 8.890 MMT, and gas output fell 1.7 percent to 9.595 BCM.
ONGC said production was broadly stable in Q2 compared with Q1. It attributed the year-on-year decline mainly to “reservoir behaviour complexities in KG-98/2 Asset in Eastern Offshore Basin”. It also cited “monsoon related operational challenges and associated delays” in two pipeline replacement projects, PRP-8 and PRP-9. Onshore gas output, the company said, was hit by lower customer offtake after disruptions at certain major consumer facilities temporarily reduced demand.
To arrest the decline at its mature fields, ONGC has widened its engagement with bp as technical service provider (TSP) across the Western Offshore. It said bp mobilised its team in August for TSP-2, which covers the entire Western Offshore except the Mumbai High field.
The board declared a first interim dividend of Rs 8 a share for FY2026-27, or 160 percent on shares of face value Rs 5. The total payout of Rs 10,064 crore is the highest ever paid in a single instalment, ONGC said. The record date is November 12. The dividend will be paid within 30 days of declaration.
ONGC’s standalone operations generated Rs 52,438 crore in net cash in H1, up 47.3 percent from Rs 35,602 crore a year earlier. Capital spending fell over the same period. Payments for property, plant and equipment declined to Rs 10,929 crore from Rs 12,339 crore. Spending on exploratory and development drilling fell to Rs 5,787 crore from Rs 6,228 crore. The company placed a net Rs 23,910 crore in term deposits during the half-year.
On the balance sheet, standalone borrowings fell 31.4 percent to Rs 5,370 crore at September 30, from Rs 7,823 crore at March 31. Net worth rose to Rs 3,63,659 crore from Rs 3,31,770 crore.
At group level, the cash position moved the other way. Consolidated net cash from operations fell 8.5 percent in H1 to Rs 55,617 crore from Rs 60,786 crore, as inventories rose by Rs 5,678 crore. Group borrowings increased 7.3 percent to Rs 1,52,473 crore at September 30, from Rs 1,42,055 crore at March 31. The consolidated debt-equity ratio held at 0.35.
The board also approved an inter-corporate loan of up to Rs 10,000 crore to OVL, a wholly owned subsidiary. The loan is valid for five years.
During the quarter, ONGC awarded two offshore development projects in the Western Offshore. The first covers MBOSN-2005-1, SD-4 and BS-17, and the second the additional development of Ratna-1 and NLM-14. According to the statement, the two involve a combined capital investment of about Rs 11,800 crore and are expected to unlock an estimated 22 million metric tonnes of oil equivalent (MMTOE) of hydrocarbon potential. ONGC also awarded Pipeline Replacement Project-X (PRP-X), estimated to cost over Rs 4,300 crore. It covers new subsea pipelines and the replacement of ageing pipeline infrastructure in the Western Offshore.
ONGC notified two onland hydrocarbon discoveries in Q2. The first was a new prospect discovery at the Amraghat-1 well in the Cachar district of the Assam-Arakan fold belt, where the company said it achieved a successful gas flow. The second was a new pool discovery at Vadatal-48 in the Cambay basin, where new sand was encountered below the Chhatral Pay. Separately, ONGC said its first exploratory well in Mahanadi deepwater block MN-DWHP-2018/1, drilled under the National Offshore Exploration Scheme (Samudra Manthan), had proved gas-bearing.
The company also took over operations of the CB-OS/2 offshore block on July 22, as the government’s nominee. The government had declined to extend the production sharing contract, in which ONGC holds a 50 percent stake and Vedanta Limited was operator with 40 percent. According to the results, the Delhi High Court dismissed Vedanta’s petition against that decision on July 22. Vedanta has since challenged the order before a division bench, where judgement is reserved. ONGC said the ultimate outcome and its impact cannot yet be determined.
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