Oil & Natural Gas Corp (ONGC) posted a five per cent drop in third quarter net profit, as a sharp rise in provisions for subsidy payments offset higher selling prices for oil and gas.
ONGC reported a net profit of Rs 6,741 crore for the quarter ended December 31, down from Rs 7,083 crore a year earlier. Its shares ended down 1.5 per cent at Rs 282, while the overall market rose 0.5 per cent.
"In Q2, the subsidy burden was less. In Q1, we paid Rs 12,060 cr and only Rs 5,700 cr in Q2. With under recovery looming large, we knew the subsidy burden will go up. Fortunately, this quarter we had Rs 3,142 crore from royalty reversal. Also, we did not have Rs 1,898 crore, which was available in the corresponding quarter of the last year (from gas pool account). Hopefully, this will come in the fourth quarter and will mitigate some effects of the under recovery,” said Sudhir Vasudeva, chairman.
