ONGC Share Price: The Oil and Natural Gas Corporation (ONGC), a Maharatna company and the biggest crude oil and natural gas name in India, reported its audited financial results (Standalone and Consolidated) for the quarter and financial year ended 31st March, 2026, on May 26. The company reported a 20.6 per cent QoQ decline in Q4 net profit at Rs 6,650 crore versus Rs 8,371 crore during the same period a year earlier, while revenue rose 13.9 per cent to Rs 35,928 crore from Rs 31,547 crore.
Following ONGC’s weak Q4 results, the brokerage, Nuvama Research, is cautious. The firm retained a reduced rating. Check the reasons given below, along with the latest target price.
Created with AI. Errors are possibleThe brokerage firm, Nuvama Research, retains a ‘reduce’ rating with an increased target price at 240 from Rs 229. Here’s why:
ONGC’s Q4FY26 EBITDAX declined 7 per cent YoY and missed the brokerage consensus estimates by 9 per cent and 7 per cent, respectively, due to lower oil and gas production along with higher operating expenses.
The company’s PAT rose 3 per cent YoY but came in 15 per cent below estimates.
ONGC Videsh Ltd (OVL) reported a sharp rise in PAT, supported by higher profit share from associates and joint ventures despite a 6 per cent YoY decline in output.
MRPL’s PAT remained subdued because of a higher tax rate, while OPaL nearly reached breakeven levels.
The brokerage raised FY27E and FY28E EBITDAX estimates by 19 per cent and 3 per cent, respectively, driven by higher Brent crude assumptions and a lower effective royalty rate.
Despite the revisions, the brokerage retained its ‘Reduce’ rating on ONGC with a target price of Rs 240, citing concerns over weak production growth.
The stock is currently trading at 5.2x FY27E EV/EBITDA and 5.6x FY28E EV/EBITDA.
KG-98/2 production declined 20 per cent QoQ due to geological issues, though management expects recovery within a year, while BP aims to boost ONGC’s West Offshore output by 24 per cent over the next decade, prompting caution over potential production slippages.
For the full fiscal year, ONGC reported a net profit of Rs 32,894.02 crore, down 7.6 per cent from Rs 35,610.32 crore of the 2024-25 fiscal year.
ONGC wrote off Rs 4,876.75 crore in exploration well costs during the quarter under review after the wells drilled yielded no commercial hydrocarbon discoveries. This compares with Rs 4,173.04-crore write-off in the corresponding quarter of the previous year.
For the full year, the exploratory well cost written off was Rs 8,235.98 crore as compared to Rs 7,479.96 crore a year back.
The Oil and Natural Gas company has also declared a final dividend of Rs 1 for its shareholders. “The Board of Directors has recommended a final dividend at the rate of Rs 1/- per equity share of face value of Rs 5/- each, i.e. @20% for the Financial Year 2025-26, subject to the approval of shareholders at the ensuing Annual General Meeting,” ONGC said in an exchange filing on Tuesday, May 26.
At the time of writing this report (9:20 AM), the shares of Oil and Natural Gas Corporation were trading 4.71 per cent lower at Rs 273.95, compared to the previous closing price of Rs 287.50.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)
