ONGC Q3 Preview: Profit may decline on weak crude, gas price realisations

Oil and Natural Gas Corp will report its earnings for the third quarter of fiscal 2024 today. The oil major may see a dip in the December quarter net profit on the back of lower crude realisation and GST provisioning. 

It's net profit is likely to fall around 13% year-on-year. Net sales are anticipated to remain flat sequentially. In the second quarter, ONGC recorded a 65% YoY rise in consolidated net profit to Rs 13,734 crore and revenue from operations dropped 13% to Rs 1.47 lakh crore.

Kotak equities: Brokerage models overall crude oil sales volumes of 4.7 mmt, natural gas sales volumes at 4.1 bcm and gross crude price realization of US$82.6/bbl and net oil price realization (post-royalty, windfall tax and cess) of $52/bbl, as lower Brent prices would be partly offset by reduction in windfall taxes.

Nuvama: Broker sees substantial 12 percent on-year EBITDA decline for ONGC due to lower crude and gas prices. Brent prices fell 7 percent annually and 4 percent sequentially in Q3FY24, and APM gas prices dropped by 24 percent to $6.5/mmbtu, as per the Kirit Parikh committee recommendation from April 2023. Anticipated declines include 3 percent on-year and 4 percent on-year in oil and gas production, with a flat on-quarter performance across segments.

JM Financial: The brokerage sees assumed net crude realisation at $72.5 per bbl in line with Brent price less windfall tax of $10 per bbl on domestic crude output. Domestic APM gas realisations to remain flat at $ 6.5/mmbtu. Overall crude sales volume to rise 0.2% QoQ and overall gas sales volume should be up 0.5% QoQ.