ONGC paces up ahead of Q1 earnings; what to track

NEW DELHI: ONGC stock advanced 1 per cent on Thursday ahead of its first quarter results later in the day.

Oil subsidy expectations, management guidance on oil and gas production over FY19 and FY20 and earnings and production outlook of OVL, ONGC's subsidiary, for FY19 will be keenly watched.

Brokerage Edelweiss Securities expects the oil major to report 63 per cent surge in core profit at Rs 6,360.90 crore compared with Rs 3,884.7 crore in the year-ago quarter. Revenues are seen rising 35.1 per cent to Rs 25,771.30 crore, from Rs 19,073.50 crore.

"We estimate EBTDAX of Rs 13,900 crore (up 22 per cent QoQ) as ONGC will benefit from higher product realisation (offset by subsidy of $5.5 per bbl) and lower opex," the brokerage said.

Brokerage Sharekhan said projected earnings would improve to Rs 7,540 crore, up 94.1 per cent YoY, led by higher oil prices, which have jumped 48.5 per cent annually. It sees operating expenses at $8.5 per barrel.

Oil and gas production is estimated to rise marginally to 12.5 mmtoe (million tonnes of oil equivalent), led by higher natural gas production.

Oil and Natural Gas Corporation Limited (ONGC)