Q2FY23 Preview: Oil and Natural Gas Corporation: Profit After Tax seen at Rs91,740 million

11 Nov 2022 , 10:25 AM

Result date: 12^th November, 2022
Recommendation: Reduce
Target price: Rs150

Oil and Natural Gas Corporation (ONGC) could witness pressure on earnings (sequentially) owing to lower crude prices and imposition of export taxes from 1^st July. Crude averaged USD 98/bbl during the quarter while the APM prices were stagnant at USD 6.1/mmbtu on a sequential basis. There could be some benefit to ONGC and other upstream companies arising from deregulation of oil sales from government defined procedure to a free market one.

As compared to the year-ago quarter, strong crude realizations are likely to be restricted by windfall taxes.
ONGC’s Profit After Tax or PAT could decline both sequentially as well as over the year-ago quarter.

Important management insights to watch out for:

• Update on gas production from the KG Basin and key timelines thereof
• Outlook on various field developments

Rs. Million	September 2022 estimates	YoY change	QoQ change
Profit After Tax	91,740	(50)%	(40)%

Source: Company, IIFL Research