India’s oil and gas behemoth Oil and Natural Gas Corporation Ltd (ONGC) reported its Q4 FY25 and FY25 financial results with a mixed performance. While its topline stayed largely steady, a sharp 20.2% drop in net profit for Q4 FY25 reflects challenges, especially from its subsidiaries — HPCL, MRPL, and OPAL.
This article explores ONGC’s latest quarterly and annual performance, production statistics, green energy ambitions, operational highlights, and what lies ahead for the company and its stakeholders.
🧾 Q4 FY25 and FY25 Financial Performance Summary
Quarterly Results – Q4 FY25 vs Q4 FY24
| Particulars (₹ Cr) | Q4 FY25 | Q4 FY24 | Change YoY |
|---|---|---|---|
| Revenue from Operations | 1,70,812 | 1,72,137 | ▼ 0.8% |
| Net Profit (Consolidated) | 8,856 | 11,096 | ▼ 20.2% |
| Net Realization (Crude Oil) | $73.72 | $80.81 | ▼ 8.8% |
| Net Realization (Gas $/MMBTU) | $6.5 | $6.5 | No change |
Full Year FY25 vs FY24
| Particulars (₹ Cr) | FY25 | FY24 | Change YoY |
|---|---|---|---|
| Revenue from Operations | 6,63,262 | 6,53,171 | ▲ 1.6% |
| Net Profit (Consolidated) | 38,329 | 55,723 | ▼ 30.7% |
| Standalone Net Profit | 35,610 | 40,523 | ▼ 12.1% |
| Standalone Revenue | 1,37,846 | 1,38,402 | ▼ 0.4% |
The company’s bottom line took a significant hit due to lower crude oil realization and weak performance from subsidiaries, despite stable revenues.
💡 Reasons for Decline in Profit
Several factors contributed to the decline in ONGC’s profitability:
-
Subsidiary Weakness:
-
Lower earnings from HPCL, MRPL, and OPAL due to adverse refining margins and costs.
-
-
Crude Oil Prices:
-
Net crude realization dropped from $80.81 to $73.72 per barrel, impacting revenues.
-
-
Higher Exploration Write-offs:
-
Exploration-related write-offs surged by ₹4,257 crore to ₹9,826 crore in FY25.
-
Major well costs:
-
Western Offshore: ₹1,152 Cr
-
KG Basin: ₹1,808 Cr
-
Kaveri Basin: ₹779 Cr
-
Assam Basin: ₹359 Cr
-
-
-
Operating Expenses:
-
Standalone expenses rose marginally by ₹753 crore, primarily due to dry wells and surveys.
-
📊 Dividend Update
Despite profit pressures, ONGC’s board has recommended a final dividend of ₹1.25 per share for FY25, rewarding shareholders with steady returns.
⚙️ Capex & Investment Focus
ONGC continues to invest heavily in growth:
| Parameter | FY25 |
|---|---|
| Total Capex | ₹62,000 Cr |
| Capex on Exploration | ₹10,300 Cr |
| Capex on Conventional E&P | ₹32,000 Cr |
| OPAL (Polymer Subsidiary) Investment | ₹18,365 Cr |
The company increased its exploration capex by 25% YoY, showing strong long-term confidence.
🛢️ Operational Highlights
| Metric | FY25 | Change YoY |
|---|---|---|
| Crude Oil Production (MMT) | 18.56 | ▲ ~1% |
| Gas Production (BCM) | 19.65 | ▼ ~2% |
| Gas Sales (MMSCMD) | ~42 | Stable |
| Wells Drilled | 578 | — |
| – Exploratory Wells | 109 | — |
| – Development Wells | 469 | — |
| Discoveries | 9 (5 onshore, 4 offshore) | — |
| Discoveries Monetised | 8 (incl. Yandapalli-1, Suryamani) | — |
The company is focused on enhanced well interventions and new drilling programs to boost production from marginal fields.
⚒️ Strategic Oil Fields & Assets
KG-98/2 Asset
-
Current Capacity: 33,000–34,000 barrels/day
-
Peak Capacity Potential: 45,000 barrels/day
-
Additional 10,000–12,000 barrels/day capacity expected soon.
Western Offshore Basin (Mumbai)
-
70% of project work completed.
-
Will add 5 MMSCMD gas production capacity by FY26.
🔋 Green Energy Transition
ONGC is increasingly investing in renewable energy:
| Parameter | FY25 |
|---|---|
| Green Capacity (Jan 2025) | 192 MW |
| Green Capacity (May 2025) | 2.5 GW |
| Green Capacity Target (2030) | 10 GW |
This sharp rise reflects ONGC’s pivot to cleaner energy, aligning with global ESG goals.
🤝 Key Partnerships & Collaborations
ONGC–BP Alliance
-
Targeted at Western Offshore oil expansion.
-
Aims to boost oil output starting FY26.
Mozambique Plant
-
Work resumed; gas delivery targeted within 3 years.
-
Will serve as a major export node for ONGC Videsh.
🔭 Future Outlook
Production & Exploration
-
Higher gas output expected from KG-98 and Western Offshore fields.
-
Enhanced crude production due to new wells.
OPAL Turnaround
-
OPAL performance to improve significantly in FY26.
-
Exit from SEZ expected to save ₹700–₹800 Cr annually.
Ethane Imports
-
Logistics & sourcing initiatives underway.
-
Ethane-based petrochemicals to begin by 2028.
Capex Allocation (Next Phase)
-
₹30,000–₹35,000 crore to be invested in exploration and renewables.
-
ONGC Videsh expected to maintain growth across international assets.
📈 Shareholder Sentiment & Market Reaction
On 23rd May 2025, post the result announcement:
-
Stock Reaction: Slightly negative due to PAT drop.
-
Investors noted strong capex and green energy transition but remained cautious due to weak subsidiary numbers.
Market is watching for:
-
Recovery in refining margins at MRPL.
-
Execution pace of new wells and green projects.
-
Stability in crude oil prices in FY26.
📌 SWOT Analysis
| Strengths | Weaknesses |
|---|---|
| Government support as PSU | Earnings volatility due to crude prices |
| Pan-India E&P footprint | Heavy subsidiary dependency |
| Strong capex commitment | Higher exploration write-offs |
| Green energy focus | Gas production slightly declined |
| Opportunities | Threats |
|---|---|
| Green capacity growth (10 GW by 2030) | Geopolitical risks in overseas assets |
| New partnerships (BP, Mozambique) | ESG and climate change regulatory pressure |
| Monetisation of discoveries | Technological lag in aging assets |
🧠 Final Verdict: Should You Bet on ONGC?
✅ Why Consider:
-
Market leader in Indian oil & gas E&P
-
Robust capex plans and operational scale
-
Green energy transition gaining traction
-
Undervalued vs global peers on P/B and P/E metrics
❌ Why Be Cautious:
-
Volatile quarterly profits
-
Subsidiary drag (especially HPCL, MRPL)
-
High exploration write-offs
-
Sensitivity to global crude & gas prices
📌 Investor Profile:
-
Long-term investors looking for stability and value.
-
Those aligned with India’s energy infrastructure growth.
-
Income investors seeking dividend returns from a PSU.
📢 Conclusion
ONGC‘s Q4 FY25 results underline a classic story of short-term profitability pressure amid long-term strategic positioning. Despite a drop in quarterly profits due to subsidiary underperformance and exploration costs, the company’s long-term outlook remains optimistic, backed by substantial capex, green energy goals, and strong asset monetization.
For investors with a 3–5 year horizon, ONGC could offer steady returns, capital appreciation, and dividend yield in India’s evolving energy landscape.
