ONGC margin rebounds to 18.73% as costs fall faster than revenue
Consolidated net profit rose 46.93% YoY, though higher tax and other income materially shaped the quarter's profit outcome.
Filed 05 Nov 2026, 17:32 IST · after market close · Oil & Natural Gas Corpn Ltd (ONGC)
Key takeaways
- Consolidated operating margin rose 11.18 percentage points QoQ to 18.73% as expenses fell 14.97% against a 3.28% revenue decline.
- Net profit rose 46.93% YoY to Rs 18,534.82 cr, but other income contributed 18.81% of pre-tax profit and the tax rate was 31.56%.
- ONGC's operating margin was 3.53 percentage points above the 15.20% median for 24 reported Energy peers.
Price around the results
Cost reduction drives the sharp QoQ margin rebound
Consolidated revenue declined 3.28% QoQ, but expenses fell 14.97%, lifting operating margin by 11.18 percentage points to 18.73%. Operating profit consequently rose 139.78% QoQ, despite interest costs increasing 19.54% and depreciation rising 23.78%. The margin was also 1.93 percentage points higher YoY, as revenue grew 25.55% while expenses grew 22.64%.
Tax and other income qualify the profit growth
Pre-tax profit rose 286.20% QoQ, but the tax rate increased 25.03 percentage points to 31.56%, limiting the net-profit increase to 182.78%. Other income accounted for 18.81% of pre-tax profit, so reported earnings were not driven only by operating performance. YoY, other income grew 47.77%, while depreciation increased 26.50% and interest was broadly unchanged at a 0.01% increase.
Margin recovers after the Q1FY27 trough
The 18.73% operating margin followed 14.59% in Q4FY26 and 7.55% in Q1FY27, reversing the decline seen through the previous two quarters. ONGC's margin was 3.53 percentage points above the 15.20% median among 24 Energy peers that had reported the same quarter. This places the quarter above the sector comparison despite the sequential revenue decline.
The stock has usually fallen after recent results
The results were filed after market close, so there was no market reaction yet. Across the past eight result reactions, the stock fell seven times, with a median absolute move of 1.93%. That history points to a predominantly negative post-results trading pattern, but does not establish the response to this filing.
Q2FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹1,98,263 cr | ₹2,04,987 cr | -3.28% | +25.55% |
| Other income | ₹5,094 cr | ₹3,858 cr | +32.04% | +47.77% |
| Expenses | ₹1,61,133 cr | ₹1,89,502 cr | -14.97% | +22.64% |
| Operating profit | ₹37,130 cr | ₹15,485 cr | +139.78% | +40.00% |
| Operating margin (%) | 18.73% | 7.55% | — | — |
| Interest | ₹3,411 cr | ₹2,854 cr | +19.54% | +0.01% |
| Depreciation | ₹11,731 cr | ₹9,477 cr | +23.78% | +26.50% |
| Profit before tax | ₹27,082 cr | ₹7,012 cr | +286.20% | +56.69% |
| Tax | ₹8,547 cr | ₹458 cr | +1766.16% | +83.04% |
| Net profit | ₹18,535 cr | ₹6,554 cr | +182.78% | +46.93% |
| EPS (₹) | ₹13.31 | ₹9.46 | +40.70% | +55.13% |
Operating margin of 18.73% compares with a Energy sector median of 15.20% across 24 peers that have reported Q2FY27.
What to watch
- Whether operating margin holds above 18.73% after the Q1FY27 level of 7.55%.
- Whether other income remains near its 18.81% share of pre-tax profit.
- Whether the tax rate stays near 31.56% rather than the Q1FY27 level of 6.53%.