ONGC’s projected Q2 performance: A year-on-year decline

PL Capital has released its second-quarter earnings estimates (July-September 2024) for the Oil & Gas sector, providing insights into the financial outlook for India's Oil and Natural Gas Corporation (ONGC). According to the brokerage house, ONGC's Profit After Tax (PAT) for Q2 is expected to dip by 9.3% year-on-year to ₹9,270 crore. However, the company is anticipated to see a slight quarter-on-quarter improvement of 3.7% in PAT figures.

This anticipated dip in annual performance may be a result of fluctuating market dynamics and external factors affecting the global energy landscape. For those looking to invest in stocks, it will be crucial to monitor these changes closely, as they can present both risks and opportunities.

ONGC's net sales are expected to decline

The brokerage firm has also predicted a modest decline in ONGC's net sales. PL Capital estimates that net sales will fall by 1.4% year-on-year, bringing the total figure to ₹34,660 crore. This decrease, though marginal, signals that ONGC is facing revenue challenges, which could impact investor sentiment. Quarter-on-quarter, net sales are expected to drop by 1.7%.

With these numbers in mind, investors evaluating whether to invest in stocks in the oil and gas sector should weigh the potential for short-term fluctuations against long-term growth.

EBITDA likely to see a 1.1% fall

Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) are another key area where ONGC is expected to experience a decline. PL Capital's report forecasts a 1.1% drop in EBITDA year-on-year, reducing the figure to ₹18,150 crore. Additionally, the quarter-on-quarter decline is projected at 2.5%, reflecting the pressure on the company's operational profitability.

Despite these figures, ONGC remains one of India's largest oil and gas producers, and for those planning to invest in stocks, the company's future potential, industry leadership, and historical performance must be considered.

Investment outlook for ONGC

While ONGC's Q2 earnings may show some downward movement, the long-term prospects in the energy sector still hold promise. The company's performance in the coming quarters, especially amid fluctuating global oil prices and domestic market conditions, will likely shape investor confidence.

For individuals considering whether to invest in stocks, particularly in energy companies like ONGC, understanding the sector's broader trends will be critical in making informed decisions.