O N G C H1FY27 Results (NSE: ONGC)
Signal: Margin expansion
The read
The H1FY27 inflection is operating margin: revenue grew 38.9% YoY to ₹90,335.60 Cr while operating margin expanded 1,033bps to 49.57%, helped by material costs falling 4.2% and employee costs falling 13.5%; PAT rose 82.0% to ₹32,522.45 Cr. The improvement is substantial, but the ₹15,583 Cr PMT JV contingent demand, ₹2,213 Cr disputed tax demand and ₹7,186 Cr JV-partner tax exposure remain material non-operating risks.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹90,335.6 Cr | +38.9% | N/A |
| Net profit | ₹32,522.45 Cr | +82.0% | |
| EPS | ₹25.85 | +81.8% | |
| EBIT margin | 49.57% |
P&L walk
H1FY27 revenue rose 38.9% YoY to ₹90,335.60 Cr, while operating margin expanded to 49.57% from 39.24%; PAT consequently increased 82.0% to ₹32,522.45 Cr, with lower material and employee costs partly offset by higher statutory levies, exploration costs and depreciation.
Segments
Offshore is the primary earnings driver, contributing ₹64,273.15 Cr of revenue and ₹32,332.75 Cr of segment result, versus onshore revenue of ₹26,062.45 Cr and segment result of ₹8,158.70 Cr; offshore revenue grew 42.9% YoY against 30.0% for onshore.
Key positives
- H1FY27 revenue from operations increased 38.9% YoY to ₹90,335.60 Cr, with offshore revenue up 42.9% to ₹64,273.15 Cr and onshore revenue up 30.0% to ₹26,062.45 Cr.
- Operating margin expanded 1,033bps YoY to 49.57%; revenue grew 38.9% while material consumption declined 4.2% and employee benefits expense declined 13.5%.
- PAT rose 82.0% YoY to ₹32,522.45 Cr and EPS rose 81.8% to ₹25.85, with EPS broadly tracking PAT.
- Operating cash flow increased 47.3% YoY to ₹52,437.55 Cr, while borrowings declined to ₹5,370.47 Cr from ₹7,823.40 Cr at March 31, 2026.
Key concerns
- Exploration costs written off increased 19.3% YoY to ₹2,188.54 Cr and depreciation, depletion, amortisation and impairment rose 14.4% to ₹14,758.76 Cr, keeping the upstream asset-cost cycle significant.
- The company approved an inter-corporate loan to wholly owned subsidiary ONGC Videsh Limited of up to ₹10,000 Cr outstanding at any point over five years, increasing capital allocation exposure to the subsidiary.
Research and educational content only. Not investment advice.