ONGC Q2 Profit Jumps 57% to Rs 15,489 Crore, Announces Record Interim Dividend

NEW DELHI, Nov 5: State owned Oil and Natural Gas Corporation (ONGC) reported a 57.3 per cent year-on-year increase in standalone net profit to Rs 15,489 crore for the second quarter of the financial year 2026-27, supported by improved oil and gas realisations and higher revenue from its operations.

The company’s standalone net profit during the July-September quarter stood at Rs 15,488.64 crore, compared with Rs 9,847.97 crore in the corresponding period of the previous financial year. However, earnings were lower than the Rs 17,033.81 crore recorded in the preceding April-June quarter.

ONGC’s standalone gross revenue increased 32.8 per cent to Rs 43,875 crore during the reporting quarter, against Rs 33,030 crore in the same period last year, reflecting improved realisations from its crude oil and natural gas portfolio.

The company also delivered a strong performance during the first half of FY27. Its standalone net profit reached Rs 32,522 crore, representing an increase of 82 per cent compared with Rs 17,872 crore in the corresponding period of the previous financial year.

The six-month earnings figure was particularly significant as it came close to the company’s entire standalone annual profit of Rs 32,894 crore recorded during FY26.

On a consolidated basis, ONGC reported a net profit of Rs 18,535 crore for the September quarter, registering growth of 46.9 per cent over the year-ago period.

The company’s improved financial performance was largely supported by higher prices realised from crude oil and natural gas sales. The average price received for nominated crude oil increased to USD 92.33 per barrel during the quarter, compared with USD 67.34 per barrel in the corresponding period last year.

Realisation from joint venture crude oil also improved, reaching USD 97.02 per barrel against USD 68.35 per barrel a year earlier.

Higher gas prices provided additional support to the company’s earnings. The price of natural gas produced from new wells increased to USD 10.24 per million British thermal units, compared with USD 8.36 during the same quarter last year.

The company stated that revenue from new well gas reached Rs 7,050 crore during the first half of FY27, contributing more than 34 per cent of the total revenue from its nominated gas portfolio.

Alongside its quarterly results, ONGC’s board approved an interim dividend of Rs 8 per equity share with a face value of Rs 5, representing a payout of 160 per cent.

The total dividend distribution will amount to approximately Rs 10,064 crore, making it the company’s highest-ever interim dividend payout in a single instalment.

The board fixed November 12, 2026, as the record date for determining shareholders eligible to receive the dividend.

The announcement is expected to attract attention from investors seeking dividend income, particularly given the company’s strong first-half earnings performance.

In another significant development, ONGC awarded two major development projects in the Western Offshore region with a combined investment value of approximately Rs 11,800 crore.

The projects are aimed at unlocking future hydrocarbon production and strengthening the company’s domestic energy supply capabilities.

The Western Offshore region remains one of India’s important oil and gas-producing areas, with several established fields contributing to the country’s domestic petroleum output.

Investment in development infrastructure is considered essential for improving recovery from existing fields, maintaining production levels and accessing additional hydrocarbon resources.

ONGC also reported two new hydrocarbon discoveries during the September quarter, adding to its exploration portfolio and supporting its longer-term resource development strategy.

However, the company’s production performance remained broadly stable compared with the preceding quarter, while year-on-year production witnessed some moderation.

According to ONGC, the decline in quarterly production was primarily associated with reservoir-related complexities in the KG-98/2 asset in the Eastern Offshore Basin.

Monsoon-related operational challenges and delays in the PRP-8 and PRP-9 pipeline replacement projects also affected production activities.

These developments highlight the challenges faced by the company in maintaining output from mature fields while developing newer offshore assets.

The energy major has been focusing on improving operational efficiency, expanding exploration activities and increasing production from recently developed resources.

The company’s financial performance also reflects the influence of international energy market conditions. Changes in crude oil prices directly affect revenue realisations, while production volumes and operational expenditure determine the extent to which higher prices translate into improved profitability.

For India, stronger domestic oil and gas production remains an important economic priority because the country depends significantly on imported energy to meet its consumption requirements.

Higher domestic output can help reduce import dependence, strengthen energy security and limit the impact of international supply disruptions.

ONGC’s planned offshore investments are therefore significant not only for the company’s future financial performance but also for India’s broader energy strategy.

The Rs 11,800-crore development projects are expected to support future production, although the actual contribution will depend on execution schedules, reservoir performance and commissioning timelines.

The company’s record dividend announcement also reflects its willingness to distribute a substantial portion of earnings to shareholders while continuing to invest in exploration and development.

Investors will now closely monitor ONGC’s production performance, crude oil realisations and progress on offshore projects during the remaining quarters of FY27.

The September-quarter results underline the importance of favourable commodity prices in supporting the company’s profitability, while the planned capital expenditure indicates its continued focus on strengthening long-term domestic energy production.