Production Growth Outlook Supports

ONGC

Despite Price Risks

Oil and Natural Gas Corp. Ltd. (

) reported muted Q3FY26 results, as falling crude prices and stagnant volumes weighed on performance. Standalone EBITDA fell 9% YoY to ₹17,300 crore, while revenue declined 6% to ₹31,500 crore. Consolidated revenue was flat at ₹1.67 trillion, with EBITDA up 3% to ₹27,400 crore, aided by better downstream margins at Hindustan Petroleum Corp. Ltd. (HPCL). Higher gas realizations provided some relief, and management expects production growth from FY27 to support earnings. Financial Performance - Standalone revenue: ₹31,500 crore, -6% YoY. - Standalone EBITDA: ₹17,300 crore, -9% YoY. - Consolidated revenue: ₹1.67 trillion, flat YoY. - Consolidated EBITDA: ₹27,400 crore, +3% YoY. - Crude price realization: $61.6/bbl, 15-quarter low, -15% YoY. Gas Realizations & Production - Gas realization: ₹23.20/SCM, +6% YoY. - New wells gas (NWG): 18% of Q3 gas revenue; expected to rise to 24% in FY27 and >35% in 3–4 years. - Oil & gas production: 10.2 mmtoe, -1.3% YoY. - FY27 production guidance: 42.5 mmtoe, +3% YoY. - KG-98/2 basin gas output: To rise to 5–6 mscmd by FY27-end (from 3 mscmd). - Daman project gas: To commence Q1FY27, ramping to 4–5 mscmd in H2FY27. - Mumbai High fields: Output 7% above expectations, aided by BP’s technical support. Capex & Projects - 9MFY26 capex: ₹24,000 crore. - FY27 guidance: ₹32,000–33,000 crore. - 20 projects underway, total investment ₹77,000 crore. - Venezuela operations (San Cristobal, Carabobo-1) expected to benefit from political changes. Outlook: - Stock up 16% in past year. - EV/EBITDA: 4.9x FY27E, slightly above long-term average. - ICICI Securities raised FY27–28 EPS estimates by 5–6% on better gas outlook. - Key risk: Sustained crude price weakness. - JM Financial: Every $5/bbl change in crude realization impacts EPS/valuation by 8–10%.