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ONGC’s 1QFY26 standalone EBITDA, at INR 187bn, was significantly above JMFe of INR 164bn (and also above consensus of INR 182bn), aided by lower opex at INR 55.8bn vs. JMFe of INR 69.5bn (after having jumped to INR 74.9bn in 4QFY25). Further, crude & gas sales volume was also slightly better and crude realisation was also a little better than JMFe. Hence, PAT at INR 80.2bn was significantly above JMFe of INR 65.3bn (though a tad below consensus of INR 82.9bn) despite other income being lower at INR 12.1bn (vs. JMFe of INR 19bn). We maintain BUY (unchanged TP of INR 285) based on our Brent crude price assumption of USD 70/bbl (while CMP is discounting ~USD 60/bbl of net crude realisation), and as ONGC is likely to see cumulative output growth of 8-10% over FY26-28 driven by KG DW 98/2 block and Western offshore blocks. ONGC is also a robust dividend play (4-5%). At CMP, it trades at 5.6x FY27E consolidated EPS and 0.7x FY27E BV.

• ONGC’s standalone EBITDA significantly above JMFe (also above consensus), aided by lower opex and slightly better crude & gas sales volume/realisation: ONGC’s 1QFY26 standalone EBITDA at INR 187bn was significantly above JMFe of INR 164bn (and also above consensus of INR 182bn) aided by lower opex at INR 55.8bn vs. JMFe of INR 69.5bn (after having jumped to INR 74.9bn in 4QFY25); further crude & gas sales volume was slightly better and crude realisation was also a little better than JMFe. Hence, PAT at INR 80.2bn was significantly above JMFe of INR 65.3bn (though a tad below consensus of INR 82.9bn) despite other income being lower at INR 12.1bn (vs. JMFe of INR 19bn). Standalone 1QFY26 EPS is INR 6.4/share. Consolidated 1QFY26 EBITDA was in line at INR 277bn, and consolidated PAT was slightly higher at INR 98bn (EPS of INR 7.8/share).
• Crude sales volume 0.4% above JMFe (though output a tad lower) while computed net realisation a little higher; gas sales volume slightly higher while realisation in line: In 1QFY26, domestic crude sales volume was 0.4% above JMFe at 4.7mmt (down 2.6% QoQ, but up 1.1% YoY) though crude production was 0.5% below JMFe at 5.24mmt (down 0.4% QoQ but up 0.1% YoY) as sales as % of production rose to 89% (vs. ~88% historically). Computed net crude realisation was a little higher at USD 66.3/bbl (vs. JMFe of USD 66.1/bbl). Further, gas sales volume was 1.3% above JMFe at 3.9bcm (down 0.3% QoQ but up 1.4% YoY) while overall gas realisation was in line at USD 7.6/mmbtu (vs. USD 7.4/mmbtu in 4QFY25). Further, the management said gas price for production from new wells is USD 8.26/mmbtu during 1QFY26 and revenue from new well gas stood at INR 17bn in 1QFY26 (delivering an additional INR 3.3bn compared to the APM gas price). Separately, in 1QFY26, OPAL’s EBITDA was negative INR 0.1bn in 1QFY26 (vs. negative INR 1.7bn in 4QFY25) with utilisation lower QoQ at 81% (vs. 95% in 4QFY25); further, PAT was negative at INR 6.2bn in 1QFY26 (vs. negative INR 13.3bn in 4QFY25).
• OVL’s weak production trend continues in 1QFY26; PAT lower QoQ at negative INR 1.1bn in 1QFY26: In 1QFY26, OVL’s crude output was down 5.4% QoQ to 1.8mmt (lower than quarterly run-rate of 2mmt in FY22 pre-Ukraine invasion) while crude sales volume was at 1.2mmt. Gas output was also down 14.3% QoQ to 0.7bcm (much lower than quarterly run-rate of 1.1bcm in FY22) while gas sales volume was at 0.4bcm. Hence, OVL’s EBITDA was muted at INR 7.5bn (vs. INR 12.3bn in 4QFY25). Reported PAT was at negative INR 1.1bn in 1QFY26 (vs. +INR 0.8bn in 4QFY25 and PAT run-rate of +INR 16- 18bn p.a. over FY21-23).
• Maintain BUY on expectation of crude stabilising ~USD 70/bbl and CMP discounting ~USD60/bbl; also likely to see cumulative output growth of 8-10% over FY26-28: We reiterate BUY (unchanged TP of INR 285 based on 6x FY27 P/E for standalone business) assuming Brent crude price of USD 70/bbl (while CMP is discounting ~USD 60/bbl of net crude realisation). Further, ONGC is likely to see cumulative output growth of 8-10% over FY26-28 driven by KG DW 98/2 block and Western offshore blocks. ONGC is also a robust dividend play (4-5%). Every USD 7/bbl rise/fall in net crude realisation results in increase/decrease in our EPS and valuation by 12-16% — Exhibit 10-11. At CMP, ONGC trades at 5.6x FY27E consolidated EPS and 0.7x FY27E BV.

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