The Oil and Natural Gas Corporation (ONGC) is likely to report a spike in revenue on the back of high crude prices during the January to March 2022 period while its profit may decline. The state-owned oil producer is due to report its financial results for the fourth quarter of 2022 fiscal on Saturday.
ONGC, an explorer and producer of crude oil, natural gas and related value-added products, benefits from high crude oil prices.
The prices have remained strong for much of 2022 after beginning the year at multi-year highs with the benchmark Brent rate broadly holding above the $100-mark since Russia's invasion of Ukraine in late February.
Aided by high crude prices, ONGC’s revenue for the fourth quarter of 2021-22 fiscal is likely to come in at Rs 34,635 crore, up 22 percent from Rs 28,473 crore in the October to December 2021 quarter, according to a CNBC-TV18 poll of analysts.
As per Street estimates, the company’s profit may shrink 21.5 percent to Rs 532.5 crore for the quarter under review against Rs 679 crore in the previous quarter. The operating profit margin is expected to be flat at 56 percent.
The firm’s earnings before interest, taxes, depreciation, and amortization (EBITDA) shall also increase by 22 percent on quarter to Rs 19,429 crore versus Rs 15,969 crore in the last quarter, analysts have predicted.
The state-owned company’s oil production is likely to have declined by a percent while gas production may have dipped 3 percent on a quarter-on-quarter basis.
Ahead of the quarterly earnings report announcement, ONGC’s stock was under pressure on Friday following the UK government's move to levy a 25 percent windfall tax on profits of oil and gas companies with crude surging over 50 percent in 2022 so far.
There is speculation that similar steps can be taken in India too as the government looks at additional revenue mobilisation measures to offset revenue loss due to recent excise duty cuts, higher fertiliser subsidies etc.