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ONGC Q3 results today: Sequential drop in profit likely, eyes on crude production guidance


NEW DELHI: ONGC is scheduled to report its December quarter results on Thursday and according to analysts, the refiner is likely to cut crude production guidance for FY19.

Kotak Securities expects the refiner to report 7 per cent sequential drop in net profit at Rs 7,690 crore due to lower other income. Higher interest cost and higher depreciation, depletion and amortisation (DD&A) expenses may also drag the profit growth.

“We expect QoQ stable Ebitda as lower crude realisation at $65/bbl will be offset by weaker rupee, higher domestic gas price and higher LPG prices. We model 8 per cent YoY decline in crude oil sales volumes to 4.54 mt and 6 per cent growth in natural gas sales volumes to 5.05 bcm from own-fields, reflecting production in the recent months,” it said.

Edelweiss Securities is expecting ONGC to further reduce crude production guidance for FY19, currently at 26 mt. This brokerage sees 47 per cent YoY rise, but a 10.6 per cent sequential fall in core profit at Rs 7,391 crore.

Lower oil production will be offset by higher gas production, higher oil prices, higher gas prices and ruoee depreciation leading to higher revenues. We expect PAT margins to expand due to greater operating efficiency with lifting costs up by just 3.6 per cent YoY,” it said.

Source: Economic Times