Rupee fall helps ONGC post 28% rise in net

The PSU incurred subsidy discount of Rs 13,764 cr to oil marketing companies in the quarter, higher by 10.7% over the past year

State-run Oil and Natural Gas Corporation (ONGC) has posted a 28 per cent jump in net profit for the quarter ended December, as currency depreciation boosted realisations in rupee terms. India’s largest oil and gas producer reported a net profit of Rs 7,126 crore during the quarter as compared with Rs 5,563 crore in the corresponding period last year.

This was better than Street estimates of a Rs 5,781 crore net profit, according to average estimates of the top seven brokerages. The company, however, disappointed on revenue, falling short of brokerage estimates. It reported net sales of Rs 20,833 crore, down 1.2 per cent, over the corresponding quarter in the previous year and lower than Street estimates of Rs 22,355 crore.

ONGC incurred a subsidy discount of Rs 13,764 crore to oil marketing companies in the quarter, higher by 10.7 per cent over the past year.

“Despite heavy load of subsidy, profits registered a good growth mainly due to rupee depreciation,” Chairman and Managing Director Sudhir Vasudeva said. He added the net profit would have been higher by Rs 7,649 crore if it was not for the subsidy.

Gross realisation was up 12.5 per cent in rupee terms to Rs 6,710 a barrel, while net realisations increased by 10 per cent to Rs 2,852 a barrel in the quarter, aided by a weaker rupee.

ONGC gets paid in dollar terms for its crude oil and natural gas sales. The rupee stood at an average of 62.03 against the dollar during the quarter as compared with 54.14 in the corresponding quarter a year ago. Net realisations in dollar terms, however, declined four per cent to $45.9 a barrel.

ONGC’s production of crude oil remained flat at 6.1 million tonnes during the three-month period. Natural gas output from its blocks declined by a marginal one per cent to 6.2 million cubic metres. The company was also helped by higher other income that more than doubled to Rs 2,662 crore during the quarter.