ONGC margin drops to 7.55% as costs outpace revenue
Consolidated net profit fell 43.27% YoY, while a 6.53% tax rate and other income equal to 55.02% of PBT softened the decline.
Filed 04 Aug 2026, 20:03 IST · after market close · Oil & Natural Gas Corpn Ltd (ONGC)
Key takeaways
- Consolidated operating margin fell 8.33 percentage points YoY to 7.55% as expenses grew 38.12% against revenue growth of 25.68%.
- Net profit declined 43.27% YoY even as revenue rose 25.68%, with other income contributing 55.02% of pre-tax profit.
- Operating margin has fallen for three consecutive quarters and is 4.94 percentage points below the 13-peer Energy median of 12.49%.
Price around the results
Revenue growth failed to convert into operating profit
Consolidated revenue rose 25.68% YoY, but operating profit fell 40.23% as expenses increased 38.12%. The same pattern was visible sequentially: revenue grew 17.94%, while expenses grew 27.65%, narrowing operating margin by 7.04 percentage points. Net profit consequently fell 43.27% YoY and 52.08% QoQ.
Lower tax and other income masked operating pressure
The tax rate dropped to 6.53% from 25.50% a year earlier, reducing the tax burden even as pre-tax profit declined 54.78% YoY. Other income accounted for 55.02% of pre-tax profit, making reported net profit less reflective of operating performance. Interest expense fell 14.59% YoY, while depreciation rose 1.00%, so neither was the main reason for the margin contraction.
Margin is now below the Energy peer median
Operating margin has declined for three consecutive quarters, from 16.80% in Q2FY26 to 15.13%, 14.59% and now 7.55%. ONGC's margin was 4.94 percentage points below the 12.49% median of 13 Energy companies that had reported the same quarter.
No immediate market reaction after the late filing
The consolidated results were filed after market close, so there was no post-result stock reaction to assess yet. Across eight recent results, the stock fell after seven releases, with a median absolute move of 1.93%, providing the relevant historical reaction range.
Q1FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹2,04,987 cr | ₹1,73,805 cr | +17.94% | +25.68% |
| Other income | ₹3,858 cr | ₹5,699 cr | -32.30% | +65.82% |
| Expenses | ₹1,89,502 cr | ₹1,48,449 cr | +27.65% | +38.12% |
| Operating profit | ₹15,485 cr | ₹25,356 cr | -38.93% | -40.23% |
| Operating margin (%) | 7.55% | 14.59% | — | — |
| Interest | ₹2,854 cr | ₹3,070 cr | -7.03% | -14.59% |
| Depreciation | ₹9,477 cr | ₹9,345 cr | +1.42% | +1.00% |
| Profit before tax | ₹7,012 cr | ₹18,640 cr | -62.38% | -54.78% |
| Tax | ₹458 cr | ₹4,962 cr | -90.77% | -88.42% |
| Net profit | ₹6,554 cr | ₹13,678 cr | -52.08% | -43.27% |
| EPS (₹) | ₹9.46 | ₹8.60 | +10.00% | +21.44% |
Operating margin of 7.55% compares with a Energy sector median of 12.49% across 13 peers that have reported Q1FY27.
What to watch
- Whether operating margin recovers from 7.55% after three consecutive quarterly declines.
- Whether expense growth moderates from 38.12% YoY relative to revenue growth of 25.68%.
- Whether other income remains near 55.02% of pre-tax profit and the tax rate near 6.53%.