Latest news with #ONGC
Time of India
32 minutes ago
- Business
- Time of India
ONGC's downstream gains to cushion impact of lower oil prices: S&P Global Ratings
State-owned Oil and Natural Gas Corporation 's ( ONGC ) earnings are likely to remain resilient in the current fiscal as income from its refining and marketing operations will rise enough to offset a decline in upstream profitability following a recent fall in oil prices, S&P Global Ratings said Monday. ONGC , it said, is likely to generate enough free cash flow to consolidate its balance sheet and support the rating, but headroom for the 'bbb+' stand-alone credit profile (SACP) remains thin, given recent acquisitions. "We project ONGC's adjusted EBITDA will be broadly stable at Rs 1-1.05 lakh crore in fiscal 2026, assuming Brent oil prices of USD 65 per barrel (bbl) in 2025 and USD 70 per bbl from 2026 onward," it said in a note. The company's funds from operations (FFO)-to-debt ratio will likely improve to more than 40 per cent over the next 12-24 months, in line with our expectation for a 'bbb+' SACP. "We expect the India-based integrated oil and gas company's earnings to remain resilient in fiscal 2026 (ending March 31, 2026). Earnings at the company's refining and marketing operations will rise enough to offset a decline in upstream profitability following a recent fall in oil prices," it said. Expanded refining and marketing margins at ONGC's subsidiary Hindustan Petroleum Corp Ltd ( HPCL ) will support the profitability of the group's downstream operations . This assumes prices at the pump remain largely unchanged amid cheaper feedstock prices. "We expect the higher marketing margins to more than cover continued losses on liquefied petroleum gas (LPG) sales. Moreover, losses on LPG sales will narrow in fiscal 2026 after the government hiked prices on LPG by Rs 50 (about 10 per cent) per cylinder in April," the rating agency said. Rising prices on ONGC's gas sales will temper the impact of lower oil prices in fiscal 2026, it added. "We expect domestic gas prices to increase after India's government raised its cap on gas prices by USD 0.25 per metric million British thermal units (mmbtu) from April 2025. Moreover, gas from new wells will be sold at a higher price." It anticipated about 10 per cent of ONGC's annual gas production will come from new wells, and their pricing will be revised upward to 12 per cent of the preceding month's India crude basket instead of 10 per cent. This translates to about USD 7.8 per mmBtu under our latest oil price assumptions. "We project discretionary cash flows of Rs 10,000-12,000 crore in fiscal 2026. A moderation is likely in capital spending to Rs 50,000-52,000 crore and in shareholder returns to Rs 6,000-8,000 crore amid softer upstream profitability. These amounts were Rs 55,700 crore and Rs 17,000 crore, respectively, in fiscal 2025," S&P said. ONGC's fiscal 2025 results were slightly below expectations. "We estimate the company's FFO-to-debt ratio was slightly below 40 per cent, compared with our expectation of 42-44 per cent". The weaker performance was largely due to an uptick in operating costs and higher debt following recent acquisitions. HPCL is eligible for government compensation when its revenue from selling LPG in the domestic market is lower than the effective cost of marketing it. This compensation would further support its credit ratios when received. However, some delay in compensation is likely because the under-recovery will only be recognised as revenue in the group's income statement after the government gives its approval, the note added.
Time of India
3 hours ago
- Business
- Time of India
ONGC's downstream gains to cushion impact of lower oil prices: S&P Global Ratings
Live Events (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel State-owned Oil and Natural Gas Corporation 's ( ONGC ) earnings are likely to remain resilient in the current fiscal as income from its refining and marketing operations will rise enough to offset a decline in upstream profitability following a recent fall in oil prices, S&P Global Ratings said it said, is likely to generate enough free cash flow to consolidate its balance sheet and support the rating, but headroom for the 'bbb+' stand-alone credit profile (SACP) remains thin, given recent acquisitions."We project ONGC's adjusted EBITDA will be broadly stable at Rs 1-1.05 lakh crore in fiscal 2026, assuming Brent oil prices of USD 65 per barrel (bbl) in 2025 and USD 70 per bbl from 2026 onward," it said in a company's funds from operations (FFO)-to-debt ratio will likely improve to more than 40 per cent over the next 12-24 months, in line with our expectation for a 'bbb+' SACP."We expect the India-based integrated oil and gas company's earnings to remain resilient in fiscal 2026 (ending March 31, 2026). Earnings at the company's refining and marketing operations will rise enough to offset a decline in upstream profitability following a recent fall in oil prices," it refining and marketing margins at ONGC's subsidiary Hindustan Petroleum Corp Ltd ( HPCL ) will support the profitability of the group's downstream operations . This assumes prices at the pump remain largely unchanged amid cheaper feedstock prices."We expect the higher marketing margins to more than cover continued losses on liquefied petroleum gas (LPG) sales. Moreover, losses on LPG sales will narrow in fiscal 2026 after the government hiked prices on LPG by Rs 50 (about 10 per cent) per cylinder in April," the rating agency prices on ONGC's gas sales will temper the impact of lower oil prices in fiscal 2026, it added."We expect domestic gas prices to increase after India's government raised its cap on gas prices by USD 0.25 per metric million British thermal units (mmbtu) from April 2025. Moreover, gas from new wells will be sold at a higher price."It anticipated about 10 per cent of ONGC's annual gas production will come from new wells, and their pricing will be revised upward to 12 per cent of the preceding month's India crude basket instead of 10 per cent. This translates to about USD 7.8 per mmBtu under our latest oil price assumptions."We project discretionary cash flows of Rs 10,000-12,000 crore in fiscal 2026. A moderation is likely in capital spending to Rs 50,000-52,000 crore and in shareholder returns to Rs 6,000-8,000 crore amid softer upstream profitability. These amounts were Rs 55,700 crore and Rs 17,000 crore, respectively, in fiscal 2025," S&P fiscal 2025 results were slightly below expectations. "We estimate the company's FFO-to-debt ratio was slightly below 40 per cent, compared with our expectation of 42-44 per cent".The weaker performance was largely due to an uptick in operating costs and higher debt following recent is eligible for government compensation when its revenue from selling LPG in the domestic market is lower than the effective cost of marketing it. This compensation would further support its credit ratios when received. However, some delay in compensation is likely because the under-recovery will only be recognised as revenue in the group's income statement after the government gives its approval, the note added.
Time of India
11 hours ago
- Business
- Time of India
ONGC Share Price Live Updates: ONGC's Stock Movement
02 Jun 2025 | 08:43:11 AM IST Discover the ONGC Stock Liveblog, your go-to destination for real-time updates and comprehensive analysis of a top-performing stock. Keep track of ONGC's latest details, including: Last traded price 239.4, Market capitalization: 301171.88, Volume: 10108840, Price-to-earnings ratio 8.33, Earnings per share 28.74. Our liveblog offers a holistic view of ONGC by examining both fundamental and technical indicators. Stay ahead of market trends with breakingnews that can impact ONGC's performance. Our market analysis and expert opinions provide valuable insights to guide your investment decisions. Join us on the ONGC Stock Liveblog and stay informed in this dynamic market landscape. The data points are updated as on 08:43:11 AM IST, 02 Jun 2025 Show more
Time of India
a day ago
- Business
- Time of India
Govt cuts APM gas price for first time in 2 years
For the first time in two years, the government has reduced the price of natural gas used for producing CNG for vehicles and cooking gas, reflecting a decline in benchmark rates. The price of natural gas from legacy fields allocated to state-owned ONGC without auction has been reduced from USD 6.75 to USD 6.41 per million British thermal units (mmBtu), according to a notification from the Oil Ministry's Petroleum Planning and Analysis Cell (PPAC). The reduction, which is the first since the government in April 2023 implemented a new formula to price such gas, will aid city gas retailers like Indraprastha Gas Ltd , Mahanagar Gas Ltd and Adani-Total Gas Ltd who had been reeling under cost pressures from rise in input cost. In April 2023, the Union Cabinet accepted an expert committee report to price on a monthly basis the gas from legacy fields, called APM gas, at 10 per cent of monthly average import price of crude oil with a floor of USD 4 and a cap of USD 6.5 per mmBtu. The cap price was to remain unchanged for two years and rise by USD 0.25 annually thereafter. In line with this, the cap rose to USD 6.75 per mmBtu in April. In the first two years, the price of gas using this formula ranged between USD 7.29 per mmBtu and USD 9.12 but the cap ensured that the rate were fixed at USD 6.50 per mmBtu. In April, the price according to this formula came to USD 7.26 per mmBtu but the final rate was USD 6.75 in line with higher cap. In May, the price came to USD 6.93 but was capped to USD 6.75 for consumers. Since there has been a fall in international oil prices in view of uncertain demand outlook, the Indian basket of crude oil averaged around USD 64 in May. Using this as a benchmark, the APM gas price came to USD 6.41 per mmBtu on gross calorific value (GCV) basis, according to PPAC. "For gas produced by Oil and Natural Gas Corporation/Oil India Ltd from their nomination fields, the APM price shall also be USD 6.41 per mmBtu on GCV basis" for the period June 1, 2025 to June 30, 2025, PPAC said. The fall in benchmark also means that the price of gas that ONGC produced from new wells in the APM fields would also come down. The government had allowed ONGC to charge 12 per cent of the oil price for the gas coming from new wells it drills. The higher price was to make up for the capex incurred in drilling new wells. As much as 5 million standard cubic meters per day of gas - or a 10th of all gas produced by ONGC - comes from new wells, according to industry sources. APM gas is one produced by state-owned firms Oil and Natural Gas Corporation (ONGC) and Oil India Ltd (OIL) from fields that were given to them on nomination basis. This gas is the input that is used in the cooking gas piped to household kitchens as well as turned into CNG for running automobiles, making fertilizers and producing electricity. Prior to April 2023, the price of gas produced from fields covered under the Administered Price Mechanism (APM) regime -- which accounts for 70 per cent of domestic gas production -- was determined semi-annually based on a formula that benchmarked it to average international prices at four gas trading hubs. APM gas is provided to city gas distributors for supply to CNG and residential PNG segments, which together accounts for 60 per cent of their sales volume. Subsequent to the April 2023 decision, APM gas prices are revised on a monthly basis but subject to ceiling and floor price. The ceiling price now is USD 6.75 per mmBtu and will rise by another USD 0.25 per mmBtu in April next year. APM gas prices had seen wide fluctuations in the years running up to the April 2023 decision. From a low of USD 1.79 per mmBtu in 2021, to a high of USD 8.57 for the 6-month period ended March 2023. The rate for difficult fields like KG-D6 of Reliance Industries has been set at USD 10.04 per mmBtu for six months beginning April 1 as compared to USD 10.16 in the preceding six months period, according to PPAC.
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Business Standard
a day ago
- Business
- Business Standard
Govt cuts natural gas price for CNG, cooking use for first time in 2 yrs
For the first time in two years, the government has reduced the price of natural gas used for producing CNG for vehicles and cooking gas, reflecting a decline in benchmark rates. The price of natural gas from legacy fields allocated to state-owned ONGC without auction has been reduced from $6.75 to $6.41 per million British thermal units (mmBtu), according to a notification from the Oil Ministry's Petroleum Planning and Analysis Cell (PPAC). The reduction, which is the first since the government in April 2023 implemented a new formula to price such gas, will aid city gas retailers like Indraprastha Gas Ltd, Mahanagar Gas Ltd and Adani-Total Gas Ltd who had been reeling under cost pressures from rise in input cost. In April 2023, the Union Cabinet accepted an expert committee report to price on a monthly basis the gas from legacy fields, called APM gas, at 10 per cent of monthly average import price of crude oil with a floor of $4 and a cap of $6.5 per mmBtu. The cap price was to remain unchanged for two years and rise by $0.25 annually thereafter. In line with this, the cap rose to USD 6.75 per mmBtu in April. In the first two years, the price of gas using this formula ranged between USD 7.29 per mmBtu and USD 9.12 but the cap ensured that the rate were fixed at USD 6.50 per mmBtu. In April, the price according to this formula came to USD 7.26 per mmBtu but the final rate was USD 6.75 in line with higher cap. In May, the price came to USD 6.93 but was capped to USD 6.75 for consumers. Since there has been a fall in international oil prices in view of uncertain demand outlook, the Indian basket of crude oil averaged around USD 64 in May. Using this as a benchmark, the APM gas price came to USD 6.41 per mmBtu on gross calorific value (GCV) basis, according to PPAC. "For gas produced by Oil and Natural Gas Corporation/Oil India Ltd from their nomination fields, the APM price shall also be USD 6.41 per mmBtu on GCV basis" for the period June 1, 2025 to June 30, 2025, PPAC said. The fall in benchmark also means that the price of gas that ONGC produced from new wells in the APM fields would also come down. The government had allowed ONGC to charge 12 per cent of the oil price for the gas coming from new wells it drills. The higher price was to make up for the capex incurred in drilling new wells. As much as 5 million standard cubic meters per day of gas - or a 10th of all gas produced by ONGC - comes from new wells, according to industry sources. APM gas is one produced by state-owned firms Oil and Natural Gas Corporation (ONGC) and Oil India Ltd (OIL) from fields that were given to them on nomination basis. This gas is the input that is used in the cooking gas piped to household kitchens as well as turned into CNG for running automobiles, making fertilizers and producing electricity. Prior to April 2023, the price of gas produced from fields covered under the Administered Price Mechanism (APM) regime -- which accounts for 70 per cent of domestic gas production -- was determined semi-annually based on a formula that benchmarked it to average international prices at four gas trading hubs. APM gas is provided to city gas distributors for supply to CNG and residential PNG segments, which together accounts for 60 per cent of their sales volume. Subsequent to the April 2023 decision, APM gas prices are revised on a monthly basis but subject to ceiling and floor price. The ceiling price now is USD 6.75 per mmBtu and will rise by another USD 0.25 per mmBtu in April next year. APM gas prices had seen wide fluctuations in the years running up to the April 2023 decision. From a low of USD 1.79 per mmBtu in 2021, to a high of USD 8.57 for the 6-month period ended March 2023. The rate for difficult fields like KG-D6 of Reliance Industries has been set at USD 10.04 per mmBtu for six months beginning April 1 as compared to USD 10.16 in the preceding six months period, according to PPAC.
