Oil & Natural Gas Corporation Share Price

ONGC Ltd: Fundamental Analysis of India's Leading Crude Oil & Natural Gas Company

India’s biggest crude oil and natural gas business, Maharatna Oil & Natural Gas Corporation Ltd. (ONGC), meets 71% of the country's domestic production needs. Crude oil is the primary input downstream companies such as IOC, BPCL, HPCL, and MRPL seek. ONGC has two subsidiaries, HPCL and MRPL. Some downstream products derived from it include gasoline, diesel, kerosene, naphtha, and cooking gas liquid petroleum (LPG).

ONGC is a unique company because it has internal service capabilities in the exploration and production of oil and gas and the related oil-field service lines. It is the winner of the Best Employer award.

This public sector organisation presently has a workforce of approximately 26,000 experts who strive to deliver their best. Based on the fundamentals, this blog assesses ONGC’s revenue, profitability, and expansion potential.

About ONGC share price NSE

The Ministry of Petroleum & Natural Gas has administrative authority for ONGC Videsh Limited, a Miniratna Schedule "A" Central Public Sector Enterprise (CPSE) of the Government of India. It is a wholly-owned international branch and a subsidiary of Oil and Natural Gas Corporation Limited (ONGC), the premier national oil company (NOC) in India.

ONGC Videsh's main activity is exploring gas and oil acreages outside of India. It also covers gas and oil development, production, and exploration. ONGC Videsh participates in thirty-five oil and gas assets in fifteen countries. In addition, it manages 23.7% of India's domestic production of natural gas and oil. After its parent business, ONGC, ONGC Videsh is the second-largest petroleum corporation in India in terms of output and reserves.

Oil and Gas Industry Overview

The oil and gas industry encompasses the global exploration, extraction, refining, transporting, and marketing of petroleum products. The industry's most significant volume of products are fuel oil and gasoline. Petroleum is also the raw material for many chemical products, including pharmaceuticals, solvents, fertilisers, pesticides, and plastics. The industry is usually divided into three major sectors: upstream, midstream and downstream.

The Indian oil and gas market is forecast to grow from 38.12 billion cubic metres in 2024 to 49.12 billion cubic metres by 2029 at a 5.2% CAGR. COVID-19 negatively impacted the market but has since rebounded to pre-pandemic levels.

Some of the key growth drivers are increasing pipeline capacity and demand for petroleum products. However, India's dependence on imported oil and gas and volatility in crude prices may hinder growth. Recent gas hydrate discoveries could create opportunities if extraction is economically feasible.

Overall, the oil and gas market plays a major role in India's energy sector and the global economy, but it faces challenges related to imports, prices, and transitioning to sustainable sources.

ONGC Ltd's Competitors

Some of ONGC’s significant competitors in the CDMO space include:

• Hindustan Oil Exploration Company Ltd.
• Oil India Ltd.
• Deep Industries Ltd.

ONGC share price history

ONGC was established under the visionary leadership of Jawahar Lal Nehru. Jawahar Lal Nehru reposed faith in Shri Keshav Dev Malviya, who laid the foundation of ONGC in the form of the Oil and Gas division under the Geological Survey of India in 1955. The Company’s Evolution can be summarised as follows:

• 1956 – Inception
• 1958 – First Oil in Cambay
• 1960 – Oil gas discovery in Gujarat
• 1963 – Oil in Assam
• 1965 – Concept of ONGC Videsh Operations
• 1970 – First Offshore well
• 1974 – Mumbai High discovered
• 1976 – Bassein Gas field of Mumbai High
• 1984 – GAIL formed out of ONGC
• 1993 – ONGC, a limited company
• 1993 – Govt of India divest 2% in ONGC share price today
• 1994 – Given 2% ONGC share price to employees
• 1999 – Equity swap ONGC, IOC, GAIL
• 2003 – Acquired Mangalore Refineries Petrochemicals Ltd from Birla Group
• 2003 – Ist equity Oil & gas from Sudan / Vietnam
• 2004 – Govt of India divests 10%
• 2006 – Diversification – ONGC Petro Additives Ltd and ONGC Mangalore Petro Ltd
• 2007 – ONGC Energy Center formed
• 2010 – Coal Bed Methane Production
• 2013 – Oil at Kazakhstan/Mozambique
• 2014 – Top Energy Company of India; 5th in Asia, 21st globally: Platts
• 2015 – ONGC Energy Center receives US Patent
• 2016 – Forbes Global: ONGC 3rd largest in India
• 2018 – 51.11% stake in Hindustan Petroleum Corporation Limited
• 2019 – Invests Rs 83,000 crore in 25 projects; oil & gas gain over 180 MT
• 2019 – Bengal Basin discovered
• 2020 – ONGC bags 7 Blocks in Bid Round IV of OALP
• 2020 – Bengal Basin dedicated to the nation
• 2022 – Vindhyan Basin discovered

With more than 60 years of Exploration, ONGC has discovered 8 of the 9 producing basins of India. They are:

• 1958 – Cambay, Gujarat
• 1963 – Assam
• 1967 – Rajasthan
• 1974 – Mumbai Offshore
• 1980 – Krishna Godavari Basin
• 1985 – Cauvery Basin
• 2019 – Bengal Basin
• 2022 – Vindhyan Basin

ONGC, as an integrated Oil and gas Corporation, has developed in-house capability for the exploration and production business. It does the Acquisition, Processing and Interpretation (API) of Seismic data, drilling, workover, engineering, etc.

Company Profile – Strengths and Weaknesses

Strengths

• ONGC is India’s largest crude oil and natural gas producer
• Firm brand name
• High profit-making and high revenues
• 30,000 employees in its workforce
• ONGC produces about 30% of India’s crude oil requirement
• Contributes 70%+ of India’s crude oil production and 80%+ of India’s natural gas production
• Strong advertising and branding of the company
• Recognition from several awards

Weaknesses

• Slow bureaucratic decisions
• Intense competition & limited market
• Government regulations

The financials

Financial Metric	Value
Market Cap	₹ 3,27,590 Cr.
Book Value	₹ 268
Dividend Yield	4.32 %
ROCE	18.4 %
Face Value	₹ 5.00
ROE	16.3 %

Shareholding pattern of ONGC Ltd

Here’s the ONGC bonus shareholding pattern of Oil & Natural Gas Corporation Ltd:

• Promoters: 58.91%
• Foreign Institutional Investors (FIIs): 9.91%
• Domestic Institutional Investors (DIIs): 16.36%
• Public: 14.82%

Oil & Natural Gas Corporation Ltd has a healthy mix of promoters and institutional and public shareholders. The shareholding pattern demonstrates the company’s positive investment appeal for domestic and foreign investors.

*The shareholding data is as of March 2024 and may change over time.

Peer Comparison

Stock	P/E Ratio	ROCE %	Div. Yield
ONGC	6.52	18.4	4.32
Oil India	8.50	17.73	3.25
Hindustan Oil Exploration Company Ltd	12.34	18.54	0.00
Deep Industries	14.97	10.25	0.65