ONGC Q4 results preview: Net profit, revenue likely to shrink; here's why

ONGC Q4 results preview: State-run petroleum giant ONGC is likely to report a 2.2 per cent sequential drop in net profit for the quarter ended March 2023 owing to the government's windfall tax on domestic oil production.

ONGC is all set to report its Q4 results on May 26. | Image: Reuters

ONGC Q4 results preview: State-run oil and gas explorer ONGC is all set to report its financial results for the quarter ended March 2023 on Friday, May 26. Analysts expect the petroleum major to report a decline in performance owing to the government's windfall tax on domestic production that may hurt the company's realisations.

According to Zee Business research, ONGC's quarterly standalone net profit is estimated at Rs 10,800 crore for the three-month period, translating to a decline of 2.2 per cent compared with the previous quarter. The analysts estimate its revenue to contract 4.4 per cent sequentially to Rs 36,900 crore.

The company is estimated to report Rs 20,700 crore in earnigns before interest, taxes, depreciation and ammortisation (EBITDA), an increase of 1.4 per cent, according to the research.

ONGC's margin — a key measure of profitability for a business — is likely to improve by 320 basis points on a quarter-on-quarter basis to 56.1 per cent, according to Zee Business research.

Investors will closely track the management's commentary on the windfall tax and its impact on the company's profitability.

Zee Business analysts peg growth in the company's sales in the gas and value added products unit at 30 per cent for the quarter, which they expect to have aided the company's margin. They, however, don't estimate much of a surprise on the oil and gas volumes.

In July 2022, the government had imposed the windfall tax on crude oil producers to counter the unexpected and above-average profits made out of a tighter global supply led by the Russia-Ukraine war.