Oil & Natural Gas Corporation (ONGC IN) – Q3FY26 Result Update – Volume outlook remains intact – Downgrade to Accumulate
Published on 14 Feb 2026
We revise our rating to "Accumulate" from Buy given concerns on sustainable volume growth for the company. Standalone oil and gas sales volumes increased 1.3% and 1.1% YoY, respectively. On a sequential basis, oil sales volumes declined 1.8%, while gas volumes improved 1.2%. Oil price realization fell sharply to USD61.6/bbl from USD72.6/bbl YoY. Consequently, revenue fell 4.5% QoQ and 6.4% YoY to Rs315.5bn (PLe: Rs309.8bn; BBGe: Rs316.8bn). EBITDA stood at Rs173.2bn (PLe: Rs158.7bn; BBGe: Rs160.1bn), declining 2.1% QoQ and 8.7% YoY due to lower oil realization. PAT came in at Rs83.7bn (PLe: Rs72.5bn; BBGe: Rs75.9bn), up 1.6% YoY supported by lower tax outgo, but down 15.0% QoQ. ONGC expects standalone FY27 production at 21.0mmt and 21.5bcm. We build in a slightly lower production expectation for oil at 20.0mmt and for gas at 20.6bcm in FY27 on standalone basis, translating into a FY25-28E production CAGR (incl JVs) of 1.7% (oil) and 2.6% (gas). Positive developments in the MH block may provide incremental volume upside. We revise our rating to ‘Accumulate’ with TP of Rs297 (earlier Rs307). Valuing standalone segment at 9x Dec’27E adj EPS and adding the value of investments.
