ONGC Has Diwali Gifts For Shareholders 

India's biggest energy explorer, ONGC's net profit came in at Rs 4,975 crore in the three months ended September 30, rising from Rs 4,233 crore a quarter earlier, the company said in a statement to exchanges. This figure is 15 percent higher than the Bloomberg consensus estimates. Total sales has risen marginally by 3.5 percent to Rs 18,287 crore. The stock rose as much as 2.52 percent touching 297.40 per share after the board approved an interim dividend and bonus share issue to shareholders.

Earnings before interest, tax and depreciation and amortisation (EBITDA) has grown 8 percent compared to the first quarter to come in at Rs 9,100 crore, while EBITDA margin expanded by 207 basis points to 49.5 percent on the back of cost control measures that were initiated in the first quarter.

Benchmark Prices

Brent crude, the ballpark figure for half of the world's crude including India's, averaged $45.9 a barrel in the three-month period ended 30 September, 8.5 percent lower than a year earlier, and staying flat on a quarter-on-quarter basis.

ONGC realized a price of $47.92 per barrel of crude, 4 percent higher than that the first quarter from self-operated blocks. In joint venture blocks, the price realization was higher by 7 percent over the same period last quarter at $ 41.71 per barrel, according to the company press release.

The company did not have to bear any subsidy burden in the second quarter. Gas price realization remained stable on a quarter-on-quarter basis, selling gas at $3.06 per million British thermal units (Btu).

ONGC plans to spend Rs 29,000 crore in this financial year to try and meet the government's target of reducing dependence on crude imports from the current 80 percent to 67 percent by 2022.

ONGC's total oil output remained flat at 6.392 million metric tons (MMT) in the second quarter, just a marginal increase from 6.345 MMT a quarter ago, while gas production rose 6 percent to 5.807 billion cubic meters. ONGC has notified seven new discoveries in second quarter taking the total figure to 15 in this financial year.

Diwali Bonanza

The board has also declared an interim dividend of Rs 4.5 per share, which translates to 27 percent of its total cash and cash equivalents. A bonus issue of 1:2 ratio, i.e., one bonus share for every two shares held has also been recommended by the board, subject to shareholders' approval.