ONGC Q2 results: Net profit up 17% at Rs 11,948 cr on lower windfall tax

State-owned Oil and Natural Gas Corporation (ONGC) on Monday reported a 17 per cent rise in its second quarter net profit primarily because of lower windfall and other taxes.

Standalone net profit of Rs 11,948.02 crore in July-September -- the second quarter of the current 2024-25 fiscal year -- was higher than Rs 10,238.10 crore earning in the same period last year, according to a company's stock exchange filing.

The profit was also higher than Rs 8,938.10 crore earning in the preceding quarter of April-June 2024.

The rise in profit was primarily because of lower windfall tax levied by the government as oil prices dropped.

ONGC paid Rs 7,829.51 crore in statutory levies in Q2, down from Rs 10,791.09 crore in July-September 2023 and Rs 9,771.95 crore in April-June 2024.

The government levies a windfall profit tax on domestic producers of crude oil to take away extraordinary gains they make when international oil prices shoot up in the aftermath of Russia's invasion of Ukraine.

Prices have since stabilised, the levy had come down in Q2. It is nil in the current quarter.

ONGC profit rose even as the company got lower prices of crude oil produced and sold to refiners who turned it into fuel like petrol and diesel.

The firm got USD 78.33 per barrel of crude in July-September, down from USD 84.84 a year back. The price of gas produced was unchanged at USD 6.5 per million British thermal unit.

"With a focused approach and continued thrust on increasing domestic production, ONGC has been able to reverse the declining trend in crude oil production. The standalone crude oil production (excluding condensate) during Q2 FY25 was 4.576 million tonnes, registering a growth of 0.7 per cent over corresponding quarter of FY24," a company statement said.

Similarly, the standalone crude oil production during April-September FY25 was 9.204 million tonnes with an increase of 0.8 per cent over H1 FY24.

On the gas production front also, ONGC has been able to arrest the degrowth. The decline which was 3.6 per cent in Q1 FY25 over Q1 FY24 has been brought down to 2.1 per cent in Q2 FY25 over Q2 FY24, ONGC said.

It produced 4.912 billion cubic metres of gas in July-September, down from 5.018 bcm a year back.

ONGC said crude oil production will rise in the subsequent quarters as production from its Krishna Godavari basin block KG-DWN-98/2 increases.

"The three oil wells of A-field of deepwater block KG-DWN-98/2 were opened on October30, 2024, thereby enhancing total oil production to about 25,000 barrels per day from eight flowing wells of Cluster-II. Remaining five oil wells are planned to be opened shortly," it said.

Revenue from operations fell to Rs 33,881 crore in July-September from Rs 35,163.04 crore a year back. Other income more than doubled to Rs 4,765.64 crore in the quarter.

For the first half, ONGC reported a net profit of Rs 20,922.12 crore, almost the same as Rs 20,765 crore in April-September 2023. For the full 2023-24 fiscal year, the company had reported a net profit of Rs 40,526 crore.

The board of ONGC declared the first interim dividend at the rate of Rs 6 per equity share for the financial year 2024-25.