ONGC is Oil and Natural Gas Corporation Limited. It is a central public enterprise that is owned by the Government of India.
*Note: Prices that are specified below is based on INR
ONGC Historical Share Price (NSE)
The current market capitalisation of ONGC is around Rs.2,30,000 crore.
Wealth and recent performanceQ1 FY 2018-19
- For the quarter ended on June 30, 2018, Oil and Natural Gas Corporation reported its total income to be Rs.27,862 crore. Q-o-q, this marks an improvement of a little over Rs.100 crore. However, with respect to the June quarter of the previous fiscal year, there has been an improvement of a little over 40%.
- The total expenses for the quarter grew by a little over Rs.4,000 crore y-o-y.
- Considering the profitability of the company, the total profit after tax for the June quarter was Rs.6,143.8 crore - a growth of more than 50% y-o-y. Consequently, the company’s basic earnings per share (EPS) for the quarter were reported to be at Rs.4.79 as against an EPS of Rs.3.03 for the Q1 FY18.
- For the year ended on March 31, 2018, ONGC Limited stated its total income for the year to be Rs.92,887.6 crore - an improvement of a little over 5% y-o-y.
- The total expenses for the year grew by a little over Rs.3,000 crore with respect to the previous fiscal year.
- As for the profit after tax for the period, it was Rs.19,945.2 crore as against a profit of Rs.17,899.9 reported for the FY 17. Consequently, the company’s basic EPS also grew from Rs.13.95 to Rs.15.54, y-o-y.
- Considering the non-current liabilities of the company for the year, it was Rs.48,481.6 crore, as against Rs.42,477.6 crore reported as on March 31, 2017.
- The total income of the company in the third quarter ending December 2017 of the fiscal year 2017–2018 was Rs.24,122.42 crore. This was an increase over the total income from the previous quarter ending September 2017, at Rs.20,896.32 crore.
- The total income for the third quarter of the fiscal year 2017–2018 was higher than the total income for the corresponding period the previous year.
- The profit before tax for the third quarter of the fiscal year 2017–2018 was Rs.7,479.95 crore which was an increase over the profit before tax for the previous quarter which was Rs.7,234.29 crore.
- The profit before tax for the third quarter of the fiscal year 2017–2018 was higher than the profit before tax for the same period the previous year which was Rs.6,252.42 crore.
- Thus, the profit before tax saw a gain of over Rs.1,000 crore in a one year period spread out over two fiscal years.
- The profit after tax expenses increased from Rs.4,352.33 crore in the third quarter of the fiscal year 2016–2017 to Rs.5,014.67 crore in the corresponding period in the fiscal year 2017–2018.
- The total segment-wise assets of the company increased from Rs.241,813.10 crore in the third quarter of the fiscal year 2016–2017 to Rs.263,867.93 crore in the third quarter of the fiscal year 2017–2018.
- The total segment-wise liabilities of the company increased from Rs.61,599.55 crore in the third quarter of the fiscal year 2016–2017 to Rs.68,931.90 crore in the third quarter of the fiscal year 2017–2018.
Stock performance in 2018
- The stock price opened at over Rs.190 in January 2018.
- Over the course of the month, the stock gained steadily, reaching a high of Rs.210. This gain was observed in the third week of January.
- Subsequently, the stock decreased in price ending at Rs.203 by the end of the month.
- The stock opened at around Rs.194 in February 2018, ending the month at Rs.188 with a low of Rs.185.
- The final price of the stock in the month of February was a decline from the price it opened with. While it was not a steep drop, it was nevertheless a decrease.
- The price has continued to decline further in March 2018 with the lowest price being Rs.180.
- In the same month, the company announced an interim dividend of 45%. The scrip finished the month trading at Rs.177.80. The prices rose marginally in April to ascend back to their previous levels at Rs.180.
- The ONGC share price continued to show an upward trend in the month of May as well, with the shares eventually inching closer to the Rs.190 mark. However, in the second half of the month, the shares plunged sharply and lost more than 10%.
- This fall was seen in the month of June as well. The scrip lost another 10% to eventually reach its 52-week low at Rs.151.80. Through most of July, the ONGC shares traded hands at levels varying from Rs.150 - Rs.160.
- It wasn’t until August that the prices recovered to reach their previous levels at Rs.180. As of early September, the shares were seen trading at levels close to Rs.170.
Stock history (2016–2017)
- In January 2016, the ONGC stock hovered around Rs.140 to Rs.150 with an initial high of Rs.160. However, by the beginning of March 2016, the stock had definitively dropped to around Rs.127. In March 2016, an interim 15% dividend was awarded and the initial news seemed to buoy the stock to around Rs.142 by the end of the quarter.
- The opening and closing ONGC stock prices for the final quarter of 2015–2016, while fluctuating during the course of the quarter, were largely steady. The stock price for the first quarter of the fiscal year of 2016–2017 remained largely between a low of Rs.130 and a high of Rs.145. There were no dividends for this quarter.
- The stock breached the Rs.150 mark in July 2016, and for the rest of the month, did not go below Rs.145. The high for the month of July 2016 was Rs.156 which the stock reached around mid-month. The stock had a steady increase during the month of August in 2016. The stock breached the Rs.160 mark in this month and the company declared a final dividend of 65% at the end of the month. The stock opened at around Rs.157 in the month of September in 2016. The peak was for that month was around Rs.171 towards the third week of September and the stock closed at around that amount at the end of the month.
- Overall, the stock gained throughout the month as compared to the price it opened with. Also, the stock gained in price over the course of the second quarter of the fiscal year 2016–2017.
- With regard to the third quarter, the stock price opened at around Rs.173 and almost immediately achieved a peak of over Rs.182, achieving yet another peak of Rs.194 towards the end of October 2016. The beginning of November saw steep decline in the stock price to about Rs.178. An interim dividend of 90% was declared and the stock climbed throughout the rest of the month to reach back to around Rs.192. In December 2016, the stock increased steadily to reach a peak of around Rs.208. This was the highest the stock had ever been in that year. Then, a bonus with a ratio of 1:2 was declared in the same month and after that the stock declined to a low of around Rs.191 by the end of the quarter.
- Overall, the stock gained over the course of the third quarter.
- With regard to the final quarter of 2016–2017, the stock opened at over Rs.190 and achieved a peak of Rs.202 and closed at around Rs.201 by the end of January. The stock almost touched Rs.205 during the course of the month. In February, an interim dividend of 45% was declared and the lowest price observed in February was Rs.192. In March, the stock fluctuated between a high of Rs.196 to a low of Rs.183, closing at Rs.185 for the month. Thus, there was a decline in the price in the final quarter of the fiscal year ending March 2017.
- In the first quarter of the fiscal year 2017–2018, the stock held steady at over Rs.180 with a low of only Rs.179 in April. The stock hit a high of Rs.192 in May, with a low of Rs.173, eventually closing at Rs.177 towards the end of the month. The stock declined in price for the rest of the month, ending at around Rs.157 for the quarter.
- Thus, there was a steep decline in price in the first quarter.
- Throughout July 2017, the stock remained at over Rs.160 for the most part and gained only a high of around Rs.169 at the end of the month. The stock declined throughout the month of August, touching a low of Rs.156 at the end of the month. It gained throughout September to end at a little over Rs.170 at the end of the month. A final dividend of 16% was declared during the month of September.
- Thus, compared to the beginning of the second quarter, the stock ended at a comparatively higher value towards the end of the same quarter.
- The stock climbed throughout the month of October 2017, reaching a peak of Rs.191 at the end of the month and continued climbing till the first week of November. An interim dividend of 60% was declared in the first week of November. From the second week of November to the end of the month, the stock declined ending at Rs.180. The stock continued to dip in the first week of December to a low of Rs.175, and then gained strongly throughout the rest of the month, ending at over Rs.195.
- Thus, the stock ended at a higher value than it started with in the beginning of the quarter. While the stock did not perform evenly throughout the quarter, it gained strongly in the last part of the quarter.
Is it a good idea to invest in ONGC stocks?
- ONGC is a Maharatna company. This indicates strong performance over a period of time. It is India’s largest publicly traded company.
- In the financial year 2015, the company made 22 new discoveries, 10 new prospects, and 12 new pools. This increases the earning potential of the company.
- The company has invested in technology that improves production. This decreases operating costs, increasing profits.
- It has increased its Western Offshore production by 7.5% potentially increasing revenue.
- It has investments around the world and contracts for oil exploration and drilling. These investments and contracts could result in the extraction of a large quantity of oil that can be sold, leading to higher revenue and profits.
- Around the world, the demand for oil and natural gas is not likely to reduce in the near future. That demand will ensure that the price of oil and natural gas do not go down drastically.
- The company has declared five dividends over the course of the last two fiscal years. This makes it a potentially good investment for the longer-term.
- While a number of other reasons could be cited, it would be better to perform personal research based on one’s own interests, financial status, and risk appetites.
- ONGC is the biggest oil exploration company in India.
- It also is the largest mining lease holder in India.
- Out of the seven basins that produce oil in India, six were discovered by ONGC.
- It is placed on the list of “World’s Most Admired Companies” compiled by Fortune.
- At present, ONGC produces around 70% of the total Indian production of crude oil.
- It has produced over 1,743 Million Metric Tonnes of oil equivalent till date.
Until 1955, only private companies were exploring the Indian Subcontinent for oil. In 1955, the Indian Government felt the need to begin exploring hydrocarbon resources for strategic reasons. The exploration was begun as part of the Indian Government’s public sector development. An Oil and Natural Gas Directorate was set up in 1955. This Directorate came under the purview of the Ministry of Natural Resources and Scientific Research. Since it involved a lot of land exploration, the Directorate employed a number of geoscientists who were part of the Geological Survey of India.
The Directorate was raised to the status of a Commission with enhanced powers since a Directorate would not have the financial and administrative powers to be a body that could function effectively. This Commission was then, by an Act of Parliament, converted into a statutory body that would function even more effectively.
After this, ONGC began actively exploring the subcontinent for oil reserves and found that there was oil in the Cambay Basin and the Assam-Arakan Fold Belt and the East Coast basins. Around the 1970s, the company went offshore in order to locate oil and Bombay High was discovered. All of these discoveries were enabled by the ONGC which had a team of scientists trained by other scientists from countries like USA, West Germany, USSR, and Romania.
The Oil and Natural Gas Commission was converted into the Oil and Natural Gas Corporation Limited in 1993 and the government disinvested some of its shares in the company. In February 1994, the company was re-organised as a limited Company. Then, over a period of time in which the ONGC formed alliances with Indian Oil Corporation (IOC) and Gas Authority of India Limited (GAIL), government holdings in ONGC came down to 84.11%.
After this, ONGC entered the global field and made investments in places like Sakhalin, Vietnam, Venezuela, Sudan, Columbia, and so on. These investments are made by a subsidiary of ONGC called ONGC Videsh Limited.
The activities of ONGC are governed by a Board of Directors. This Board is responsible for devising strategies, implementing policies, and reviewing performance. The Board is headed by the Chairman and Managing Director and six other full-time Directors. The Board also comprises of nine Non-Executive Directors who are nominated by the Government of India. The Board also has a permanent invitee, the Managing Director of ONGC Videsh Limited. The current Chairman and Managing Director is Mr. Shashi Shanker. Other Directors at ONGC include, Mr. D.D. Mishra, Mr. A.K. Dwivedi, Mr. Subhash Kumar and Mr. Rajesh Kakkar.
Listings and stock indices
Stocks of ONGC can be bought and sold on the NSE and the BSE.
BSE: 500312; NSE: ONGCEQ; ISIN code: INE213A01029; Sector: Petroleum; Industry: Oil drilling and exploration
The company is part of indices like the Nifty 50, Nifty Energy, S&P BSE Sensex and so on.
The company is also listed on the Cochin Stock Exchange Limited, MCX Stock Exchange, Madras Stock Exchange Limited, et cetera.
Registered office: 5, Nelson Mandela Marg, Vasant Kunj, New Delhi - 110070
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