In the first quarter of FY26, Oil and Natural Gas Corporation (ONGC) and Oil India Ltd. (OIL) presented a contrasting financial performance. While ONGC demonstrated better profitability, it grapples with production challenges, whereas Oil India is poised for consistent production growth.
ONGC's Q1 Performance
ONGC's Q1 2025-26 results reveal a mixed bag. The company's standalone net profit declined by 10% to ₹8,024 crore, compared to ₹8,938 crore in the same period last year. This decrease is primarily attributed to lower crude oil prices, with price realization at $66.13 per barrel against $83.05 per barrel in Q1 FY25. However, the consolidated net profit saw an increase of 18.2% to ₹11,554 crore. Gross revenue stood at ₹1,63,108 crore, a 3.5% year-on-year decrease.
Despite these challenges, ONGC's crude oil production increased by 1.2% to 4.683 million tonnes. Natural gas production remained nearly flat at 4.846 billion cubic meters. Revenue from new well gas reached ₹1,703 crore, providing an additional ₹333 crore compared to the APM gas price due to a 20% premium. The company also reported two new offshore discoveries during the quarter. The Vajramani discovery in Mumbai offshore flowed oil at 2,122 barrels per day (BPD) and gas at 83,120 cubic meters per day, while the Suryamani prospect discovery flowed oil at 413 BPD and gas at 15,132 cubic meters per day. ONGC also commenced production from the PY-3 field in the Cauvery Basin, expecting 4,000 BPD of oil and 88,000 standard cubic meters a day of gas.
Oil India's Q1 Performance
Oil India Ltd. also released its Q1 results, showcasing a 45% rise in consolidated profit to ₹1,896 crore. However, the company's EBITDA fell by 19% to ₹2,100 crore, impacted by higher 'other expenses'. Revenue also experienced a 10% dip, settling at ₹7,928.66 crore. Oil India's net oil realization stood at $66.2 per barrel, and gas realization came in at $6.7 per million British thermal units.
Contrasting Fortunes and Future Outlook
ONGC's struggle to increase production is evident, with the KG basin ramp-up delayed by an early monsoon. In contrast, Oil India has demonstrated a consistent rise in production, with a 4.3% compound annual growth rate (CAGR) over the past three years.
Despite ONGC's current profitability, challenges in boosting production could see Oil India taking the lead in the near future. While ONGC's standalone EBITDA remained unchanged year-on-year at ₹18,700 crore, Oil India's EBITDA fell by 19% to ₹2,100 crore, weighed down by higher 'other expenses'.
PL Capital has maintained a 'Buy' rating for Oil India, anticipating a significant production increase on the horizon. They project a conservative rise to 3.8 million metric tonnes (MMT) of oil and 3.9 billion cubic meters (BCM) of gas in FY27E, from 3.4 MMT and 3.3 BCM in FY25.
Other Key Players
Indian Oil Corporation Ltd (IOC) reported a consolidated net profit of ₹6,813.71 crore for Q1 FY26, a significant 93.1% year-on-year jump. The oil major's revenue from operations stood at ₹2.2 trillion, marginally higher by 0.9% from the previous year.
