Drop in global oil prices and lower realizations impact earnings in July–September quarter
New Delhi (Economy India): State-run Oil and Natural Gas Corporation (ONGC) on Monday reported an 18% decline in its consolidated net profit for the July–September quarter of FY2025, primarily due to a fall in global crude oil prices and lower realizations from its exploration and production business.
According to an exchange filing, the company’s net profit stood at ₹9,848 crore during the second quarter, compared to ₹11,984 crore in the same period last year. Despite strong domestic gas production and improved refining margins from its subsidiaries, weaker crude prices weighed on overall profitability.
Revenue and operational performance
ONGC’s gross revenue declined marginally during the quarter as global benchmark Brent crude prices averaged around $77 per barrel, compared to about $90 per barrel a year earlier.
This price drop directly impacted ONGC’s upstream revenue from oil and gas sales.
The company’s total income stood at ₹1.66 lakh crore, slightly lower than the ₹1.70 lakh crore reported in Q2 FY2024. However, gas output and refining performance provided partial relief, with the company’s downstream subsidiaries, such as HPCL and MRPL, reporting improved margins during the quarter.
Production and exploration updates
During the quarter, ONGC produced approximately 5.2 million tonnes of crude oil and 6.1 billion cubic metres (bcm) of natural gas, marking a 2% rise in gas output and a steady oil production level compared to last year.
The company said its KG-DWN-98/2 (KG Basin) project continues to ramp up, with additional wells expected to come online by early 2026.
CMD Arun Kumar Singh said,
“Despite fluctuations in global energy prices, ONGC remains committed to enhancing production through strategic exploration and digital transformation in its operations. Our focus is to strengthen energy security and maintain steady returns to shareholders.”
Dividend and financial health
ONGC declared an interim dividend of ₹2.50 per share for FY2025, maintaining its strong payout record.
The company’s earnings per share (EPS) for the quarter stood at ₹7.65, while the debt-to-equity ratio remained comfortable at 0.16, reflecting a robust balance sheet.
Future outlook: Focus on gas and renewable projects
Analysts believe ONGC’s medium-term growth will depend on natural gas expansion and its transition strategy into renewables.
The company has already committed investments of over ₹1 trillion in offshore development projects, deepwater exploration, and green energy ventures, including wind and solar capacity additions.
Energy analyst Ritu Anand from Motilal Oswal said,
“Lower crude prices have certainly dented profits, but ONGC’s diversification into gas and renewables positions it well for the coming decade. A rebound in global oil demand or price stabilization could quickly restore profitability.”
Key Financial Highlights: Q2 FY2025
| Particulars | Q2 FY2025 | Q2 FY2024 | Change (YoY) |
|---|---|---|---|
| Net Profit | ₹9,848 crore | ₹11,984 crore | ▼ 18% |
| Total Income | ₹1.66 lakh crore | ₹1.70 lakh crore | ▼ 2% |
| Crude Oil Production | 5.2 MT | 5.3 MT | ▼ 2% |
| Natural Gas Production | 6.1 BCM | 6.0 BCM | ▲ 2% |
| Brent Crude (avg.) | $77/barrel | $90/barrel | ▼ 14% |
| Interim Dividend | ₹2.50/share | ₹2.50/share | — |
ONGC’s Q2 results highlight the vulnerability of upstream oil companies to global crude fluctuations. However, stable gas output, refining gains from subsidiaries, and ongoing diversification into renewables and deepwater fields provide a cushion against price shocks.
The company’s strong fundamentals and low leverage ensure it remains a cornerstone of India’s energy sector in the years ahead.
(Economy India)
