1. At a Glance
India’s oil lifeline or just another PSU with an identity crisis? ONGC produces over 70% of India’s crude and 84% of its natural gas — yet the stock trades at a discount like it’s been blacklisted. Solid dividends, massive reserves, and geopolitical tentacles — but are investors tired of its fossilized growth?
2. Introduction with Hook
If Reliance is the flamboyant cousin in a Tesla, ONGC is the old uncle still driving a Maruti 800 — dependable, frugal, but stuck in 2005.
- Contributes 70% of India’s crude oil production
- 5% dividend yield (yes, every year it pays rent)
- Yet stock is down 24% YoY.
Why? Because the market can smell when a PSU sleeps on potential harder than your Monday alarm.
3. Business Model (WTF Do They Even Do?)
ONGC explores, drills, pumps, refines, and exports crude oil and gas. But this ain’t just Desi oil.
- Domestic Upstream: Core business — oil & gas fields across India
- Overseas: Videsh JV ops in Vietnam, Egypt, Iran, Australia etc.
- Integrated Ventures: Petrochem JV (OPaL), pipelines, refining via HPCL
- Assets: 365,000+ Cr in fixed assets, CWIP ₹87,000 Cr — their balance sheet is longer than your college crush’s WhatsApp last seen.
4. Financials Overview
plaintextCopyEditFY25 Snap (₹ Cr):
Revenue : ₹6,63,262
Net Profit : ₹38,329
EPS : ₹28.8
ROE : 10.7%
Book Value : ₹273
Dividend Yield : 5.02%
OPM : 13%
- Revenue YoY: +12%
- PAT YoY: -33% (Oil price dip + high depreciation)
- Still generated ₹91,000 Cr operating cash — PSU DNA but private muscle
5. Valuation
Currently trading at:
- P/E = 8.44
- P/B = 0.89
- Dividend Yield = 5.02%
That’s not undervaluation. That’s the stock begging for love.
EduFair Value Range:
| Method | Value Estimate |
|---|---|
| DCF-ish | ₹275–₹310 |
| EV/EBITDA | ₹260–₹290 |
| PB (at ROE ~11%) | ₹290 |
🧠 FV Range: ₹260–₹300
Below ₹250? Market’s throwing ONGC out with yesterday’s paratha.
6. What’s Cooking – News, Triggers, Drama
- 🛢️ Tie-up with Mitsui for VLECs — shipping ethane to OPaL
- 🎙️ New Director (Exploration) — fresh oil hunting blood
- 🏗️ Capex alert: CWIP still at ₹87,000 Cr = massive assets about to go live
- 📉 FY25 Net Profit fell YoY due to:
- Lower crude price realization
- Higher depreciation
- Still, operating profit is ₹88,000 Cr
Expect more partnerships, monetization, and probable HPCL dividend unlocks.
7. Balance Sheet
| Metric | Mar 2025 (₹ Cr) |
|---|---|
| Equity Capital | 6,290 |
| Reserves | 3,37,150 |
| Borrowings | 1,87,817 |
| Fixed Assets | 3,65,498 |
| CWIP | 87,037 |
| Total Assets | 7,58,723 |
- Debt up 24% YoY → Capex intensive phase
- Yet D/E still manageable thanks to reserves
- CWIP = ₹87K Cr → Major earnings potential baked-in
8. Cash Flow – Sab Number Game Hai
| FY25 (₹ Cr) | Amount |
|---|---|
| Operating Cash Flow | ₹90,868 |
| Investing Cash Flow | -₹43,022 |
| Financing Cash Flow | -₹47,908 |
| Net Cash Flow | -₹61 |
Yes, net cash is technically flat. But this PSU printed more free cash than a Bollywood producer.
9. Ratios – Sexy or Stressy?
| Metric | FY25 |
|---|---|
| ROE | 10.7% |
| ROCE | 12.4% |
| OPM | 13% |
| EPS | ₹28.8 |
| Dividend Payout | 43% |
✅ Dividend king
❌ Margin pressure when oil dips
🟡 ROCE soft due to capital-heavy base, but not a red flag (yet)
10. P&L Breakdown – Show Me the Money
| Year | Revenue (₹ Cr) | Net Profit (₹ Cr) | EPS (₹) | OPM % |
|---|---|---|---|---|
| FY23 | 6,32,291 | 32,778 | ₹28.17 | 12% |
| FY24 | 5,91,396 | 57,101 | ₹39.13 | 17% |
| FY25 | 6,63,262 | 38,329 | ₹28.80 | 13% |
- Revenue volatility = crude price
- EPS dipped, but cash gen stayed strong
- OPMs holding near 13% = efficiency improving
11. Peer Comparison
| Company | P/E | ROE % | Div Yield | CMP/BV | OPM % |
|---|---|---|---|---|---|
| ONGC | 8.44 | 10.7 | 5.02% | 0.89 | 13% |
| Oil India | 11.08 | 13.35 | 2.35% | 1.46 | 34% |
| Hind Oil Expl. | 15.52 | 11.8 | 0.00% | 1.73 | 41% |
| Selan Expl. | 13.44 | 17.13 | 0.00% | 2.12 | 34% |
Takeaway: ONGC = most undervalued. But also least nimble.
12. Miscellaneous – Shareholding, Promoters
| Holder | Jun 2025 |
|---|---|
| Promoter (GoI) | 58.89% |
| FII | 7.11% |
| DII | 19.93% |
| Public | 3.76% |
| Shareholders | 30.3 lakh |
FIIs trimmed stakes in FY25. But DIIs and retail see the value.
If GoI offloads more? 🎉 Float increases → rerating?
13. EduInvesting Verdict™
ONGC is the Godzilla of India’s energy sector. Massive, dominant, sometimes asleep — but still capable of shaking the entire index when it moves.
With CWIP about to convert, high dividend visibility, and FCF gushing stronger than its oil wells, ONGC is no slouch. But it’s not for the impatient.
Don’t expect it to turn into a growth-tech monster — but if crude stabilizes and PSU rerating continues, this dinosaur might just roar.
Metadata
– Written by EduInvesting Research | 18 July 2025
– Tags: ONGC, Crude Oil, PSU Stocks, Energy Sector, Dividend Stocks, Oil Exploration
