InvestorQ : What is your quick view on the ONGC results for the DEC-20 quarter as the profits have fallen on a yoy basis?
vaishnavi mhatre made post

What is your quick view on the ONGC results for the DEC-20 quarter as the profits have fallen on a yoy basis?

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vidhya Laxmi answered.
5 months ago
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India’s largest public sector oil extractor, ONGC Ltd, reported a fall in net profits by -47% in Q3 at Rs.2,643 crore and this was largely on the back of higher statutory levies and exploration related write-offs in the quarter. Even the gross revenues of ONGC for the Dec-20 quarter fell by -8.38% to Rs.100,289 crore. In fact, the top line also took a hit as the lower crude oil prices used to translate earnings into value terms were comparatively lower.

Brent crude prices have now picked up above $62/bbl but the average price in the Dec-20 quarter was much lower because the price of oil has rallied more than 60% since Biden was elected President of the United States. Despite the sharp fall in raw material costs, the operating profits were down -42% at Rs.4,785 crore. OPM corrected sharply from 7.47% in Dec-19 quarter to 4.77% in Dec-20 quarter.

It was the combination of operating pressures and the exploration write-offs in the quarter that eventually took its toll on the company’s net profits for the Dec-20 quarter. The PAT margins or the net profit margins also fell very sharply from 4.55% in the Dec-19 quarter to 2.64% in the Dec-20 quarter.

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