The share price of Oil and Natural Gas Corporation (ONGC) rose by up to 2.29% on Tuesday, November 12, 2024, reaching an intraday high of ₹262.80. This upward trend came after the company reported a 17.1% year-on-year (YoY) profit increase for Q2FY25, posting ₹11,984 crore compared to ₹10,238 crore in the corresponding quarter of FY24.
Despite the profit surge, ONGC's gross revenue dipped 3.6% YoY to ₹33,881 crore in Q2FY25 from ₹35,162 crore in Q2FY24.
Strong operational performance amidst challenges
ONGC has emphasised its commitment to boosting domestic production, successfully reversing the decline in crude oil output. In Q2FY25, the standalone crude oil production (excluding condensate) grew by 0.7% YoY, reaching 4.576 million metric tons (MMT).
On the natural gas front, the company reduced the rate of decline in production. The drop in gas output, which was 3.6% in Q1FY25 compared to Q1FY24, narrowed to 2.1% in Q2FY25. Notably, gas production in September 2024 showed a marginal 0.3% growth compared to September 2023, reflecting ONGC’s resilience in a challenging environment.
These developments highlight ONGC's pivotal role in driving efficiency in the energy sector, which is critical for share market investment enthusiasts seeking reliable opportunities.
New discoveries bolster ONGC’s prospects
As part of its exploration efforts, ONGC announced six discoveries in FY25 so far, comprising three onshore and three offshore locations. Among these, four are classified as prospects, and two are new pools. These findings underline the company’s robust exploration strategy, aiming to secure long-term growth and attract share market investment.
Dividend declaration Enhances investor appeal
To reward its shareholders, ONGC’s Board of Directors has declared a first interim dividend of ₹6 per equity share, totalling a payout of ₹7,548 crore. The record date for dividend distribution is set for November 20, 2024. This move reinforces ONGC's reputation as a shareholder-friendly company, making it an attractive option for those considering share market investments.
ONGC’s legacy in India’s energy sector
Founded in 1955 and later incorporated as a limited company in 1994, ONGC has been instrumental in supporting India’s energy independence. The company contributes approximately 71% of the country’s domestic oil and gas output.
Its operations span the entire oil and gas lifecycle, from exploration and drilling to refining and marketing. ONGC also leverages advanced technologies to maintain its competitive edge globally, making it a noteworthy player for share market investment.
Expanding global footprint through ONGC Videsh
ONGC’s international presence is driven by its subsidiary, ONGC Videsh Limited, which holds interests in 35 oil and gas assets across 15 countries. This diversification bolsters ONGC’s position in the global energy market, further enhancing its appeal in the realm of share market investments.
Market reaction and outlook
At 10:16 AM on November 12, 2024, ONGC shares were trading at ₹257.05, marking a modest 0.06% gain. Meanwhile, the BSE Sensex was up 0.12%, trading at 79,591 levels. The combination of robust financial performance, strategic initiatives, and attractive dividends continues to position ONGC as a reliable choice for investors exploring share market investments.
Why ONGC should be on your radar
ONGC's strong Q2FY25 results, driven by profit growth, strategic discoveries, and a shareholder-friendly dividend policy, highlight its resilience and potential in India’s energy landscape. For investors keen on share market investments, ONGC offers a compelling blend of growth and stability, supported by its innovative strategies and global footprint.
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