InvestorQ : What is your view on the sharp growth in profits of ONGC in the Sep-21 quarter?
Arusha Ray made post

What is your view on the sharp growth in profits of ONGC in the Sep-21 quarter?

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4 weeks ago
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It was a stellar set of results by ONGC for the Sep-21 quarter. It reported 45.93% growth in total revenues for the Sep-21 quarter at Rs.122,029 crore on a consolidated basis. Among major verticals of ONGC, offshore E&P grew by 39.8% at Rs.15,636 crore in revenues while onshore E&P revenues grew 52.5% at Rs.8,671 crore. HPCL refining and marketing revenues grew 47.7% at Rs.105,417 crore. Strong Brent crude prices helped the performance.

It was a quarter of record net profits for ONGC. On a yoy basis, net profits at Rs.18,055 crore in the Sep-21 quarter higher by 329% on yoy basis. This was not only the highest quarterly profit reported by ONGC but the highest by any Indian company in history in any one quarter. While the EBIT was helped by higher oil realizations per barrel due to robust crude prices, the net profit also got an one-time boost from Rs.8,716 crore deferred tax credits.

In the absence of these deferred tax credits, growth in profits would be more moderated. Net profit margins or NPMs stood at 14.80% in the Sep-21 quarter as against a much smaller 5.04% in the Sep-20 quarter and 5.53% in the Jun-21 quarter. ONGC has declared dividend of Rs.5.50 per share on the par value of Rs.5. This translates into a dividend declaration percentage of 110%.

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