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MUMBAI: Shares of state-owned oil and gasoline producer Oil and Natural Gas Corp. Ltd (ONGC) rose in early offers on Wednesday. The firm’s better-than-expected June quarter earnings, introduced late Tuesday, have happy buyers.
While ONGC’s standalone web revenue for the quarter declined a whopping 92% year-on-year to ₹496 crore, it was higher than the ₹54 crore loss estimated by analysts polled by Bloomberg. The firm reported a pointy 63% year-on-year drop in its earnings earlier than curiosity, tax, depreciation and amortisation (Ebitda) to ₹4,780 crore. Analysts say ONGC’s better-than-expected June quarter income may be attributed to decrease than estimated working costs. Other bills declined 16% year-on-year, whereas statutory levies and exploratory costs written off fell about 52%.
Even so, the covid-19 pandemic took a toll on international crude oil costs, which in flip weighed on ONGC’s income efficiency. As such, the corporate’s crude oil worth realisations for the June quarter dropped practically 57% to $28.72 per barrel. This can be far decrease than the March quarter crude realisation which was $49.01 per barrel. Further, gasoline costs had been decrease as nicely, contributing to the subdued revenues. Overall, ONGC’s revenues declined 51% year-on-year to ₹13,011 crore.
On the brighter facet, crude oil manufacturing was pretty resilient easing simply 3.5%. But gasoline manufacturing declined at a sooner tempo of 13.6% largely due to decrease offtake by some prospects.
True, general enchancment in manufacturing is essential hereon however realisations matter extra for profitability, in response to analysts. But the outlook for crude oil stays muted and that’s a dampener. Benchmark Brent crude oil costs have recovered well from the lows of $19 a barrel in April to about $46 a barrel at present. An additional rise in crude costs, although, could be difficult and that may weigh on the sentiment for the ONGC inventory. Unsurprisingly, ONGC’s shares are as a lot as 38% decrease from their pre-covid highs seen in January.
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