Stock Analysis of Oil & Natural Gas Corporation
Fundamental & Technical Analysis of Oil & Natural Gas Corp.
STOCK ANALYSIS
8/30/20256 min read
About Company
Oil and Natural Gas Corporation (ONGC) is India’s largest government-owned company that explores and produces oil and natural gas. Founded in 1956, ONGC provides about 70% of India’s crude oil and around 84% of its natural gas, making it very important for the country’s energy needs. Headquartered in Delhi and managed by the Government of India, ONGC works in many parts of India and also has projects in other countries. It owns pipelines and rigs that help extract and transport oil and gas. The company plays a key role in making sure India has a steady supply of energy for everyday use like fuel, cooking gas, and power generation. It is recognized as a major and profitable public sector company and has the special status of Maharatna, showing its importance in India’s economy and energy security.
Business Segments
ONGC's business segments mainly include Exploration and Production (E&P) and Refining and Marketing. In the Exploration and Production segment, ONGC explores and produces crude oil and natural gas in India and abroad. It operates oil and gas fields, drilling rigs, and pipelines to extract and transport these resources. The Refining and Marketing segment involves refining crude oil into petroleum products like gasoline, diesel, and LPG, and marketing these products for consumers and industries. Additionally, ONGC is involved in related sectors such as petrochemicals, liquefied natural gas (LNG) supply, pipeline transportation, and renewable energy projects. Through its subsidiaries, ONGC also operates refineries and engages in power generation and other energy-related services.
Company's Facilities
ONGC has many important facilities supporting its operations. It owns and operates over 230 drilling and workover rigs for oil and gas exploration and production across India. The company manages more than 11,000 kilometers of pipelines for transporting oil and gas. ONGC also has refining and petrochemical plants like the Mangalore Refinery and Petrochemicals Limited (MRPL) and the ONGC Petro Additions Limited (OPaL) complex in Gujarat. Additionally, ONGC has wind and solar power plants to support clean energy development. It has established townships and medical facilities for employees, along with training institutes focused on petroleum safety and management. ONGC operates internationally through its subsidiary ONGC Videsh, with assets in 15 countries, adding a global dimension to its facilities and operations.
Production Capacity
As of the financial year 2024-25, ONGC’s crude oil production was about 18.56 million metric tonnes, showing a slight increase from the previous year. Its natural gas production stood at approximately 19.65 billion cubic meters. ONGC’s total production, including oil and gas, reached around 10.28 million tonnes of oil equivalent. The company has a target to increase its oil and gas output by around 11% by the fiscal year 2025-26, aiming for about 20.8 million tonnes of oil and 23.7 billion cubic meters of natural gas production. These production numbers reflect ONGC's role as India's largest producer of oil and gas, striving to reduce the country’s dependency on imports by enhancing domestic production.
Future Plans
ONGC's future plans focus on expanding its production capacity, increasing its hydrocarbon reserves, and making a major push into renewable energy and sustainability. The company aims to double its hydrocarbon reserves by 2032 and achieve 10 gigawatts (GW) of renewable energy capacity by 2030 as part of its net-zero emissions roadmap targeting 2038. ONGC plans substantial investments of around ₹1,00,000 crore to support this transition with a combination of organic growth and acquisitions.
The company is also setting up a crude and refined fuels trading unit to better manage its group companies' resources. It has acquired renewable energy assets through subsidiaries and joint ventures, including wind and solar power plants, rapidly expanding its clean energy portfolio. ONGC is committed to integrating green hydrogen, biofuels, and other low-carbon energy technologies alongside its core oil and gas business. It is also focusing on importing and trading natural gas, considered a cleaner transition fuel.
Financial Prospects of the Company
Market Valuation & Stock Price
The market valuation of the company is 2,94,014 crores, and the stock price is 234
Price-to-Earnings Ratio (PE ratio)
The price-to-earnings ratio of the company is 8.14
Book Value (PB ratio)
The book value of the company is 273
Price-to-Book Value (PE x PB)
The price-to-book value of the company is 7.00
Earnings Per Share (EPS)
The earnings per share of the company is 28.6
Return Ratios
The return on capital employed (ROCE) is 12.0%, and the return on equity (ROE) is 10.6%
Dividend Yield
The company pays an annual dividend yield of 5.24%
Sales & Profits in the last 5 Years
In FY 2020-21, sales were 3,03,849 crores and profits were 21,360 crores. In FY 2021-22, sales were 4,91,246 crores and profits were 49,294 crores. In FY 2022-23, sales were 6,32,291 crores and profits were 32,778 crores. In FY 2023-24, sales were 6,01,581 crores and profits were 55,273 crores. In FY 2024-25, sales were 6,12,065 crores and profits were 38,329 crores.
Sales & Profit Growth in the Last 5 Years
In the last 5 years, sales growth was 9.06% and profit growth was 19.4%. In the last 3 years, sales was 7.61% and profit growth was -8.19%. In the last 1 year, sales growth was 0.35% and profit growth was -20.7%
Investors
Shareholding Patterns
The promoter holds 58.89%, FIIs hold 7.08%, DIIs hold 19.85%, the Government holds 10.30%, and the Public holds 3.88%
Company News
A number of significant developments are highlighted in the most recent ONGC news from August 2025. Within one and a half to two years, ONGC anticipates a significant rise in oil output from the Mumbai High offshore field, with the goal of raising the current recovery rate from 30% to at least 45%. About 25% of India's oil production comes from Mumbai High, which also has substantial oil and gas reserves. Arun Kumar Singh, the chairman of ONGC, added that the company will keep buying Russian crude oil as long as it is still profitable and there are no restrictions on it. In order to increase domestic energy production, ONGC has also begun selling natural gas from the Chinnewala Tibba field in Rajasthan. With consistent production growth and the expansion of renewable energy projects, the company achieved outstanding financial performance for the fiscal year 2024–2025. Through acquisitions, ONGC keeps expanding its green energy footprint and plans to include renewable energy in its portfolio in addition to its conventional oil and gas activities.
Technical Analysis
Company Chart
Moving Average (MA)
The stock is trading under the 50-MA, which indicates that the stock is in a bearish trend.
The stock is trading under the 200-MA, which indicates that the stock is also in a bearish trend.
Chart Patterns
The company chart shows that the stock has faced a major correction in the last few months. At present, the stock seems to be in a sideways trend and may give a breakout if the market conditions get better.
Relative Strength Index (RSI)
Currently, the RSI of the stock is 37, which indicates that the stock is neither in the overbought zone nor in the oversold zone.
Strengths & Weaknesses
Strengths
Strong Market Position: ONGC is India’s largest producer of crude oil and natural gas, supplying over 30% of the country's crude oil and about 84% of natural gas, making it a dominant player in the Indian energy sector.
Government Backing: As a government-owned company, ONGC benefits from substantial financial support and strategic importance in national energy security.
Diverse Portfolio: Beyond exploration and production, ONGC has a diversified business that includes refining, petrochemicals, power generation, and IT services.
Advanced Infrastructure and Technology: The company operates numerous drilling rigs and pipelines with cutting-edge engineering solutions and maintains strong research and development collaborations with top institutions.
Strong Brand and Reputation: ONGC is recognized as a trusted and valued brand with extensive experience, strong group dealer networks, and a commitment to sustainability and corporate social responsibility.
Global Presence: Through its subsidiary ONGC Videsh, the company holds participating interests in oil and gas assets across 15 countries, enhancing its international footprint.
Weaknesses
Decreasing Market Share Growth: ONGC faces intense competition which limits its market share growth and its profitability ratios are below the industry average.
Underinvestment in R&D: Although ONGC invests in research and development, its spending and innovation pace lag behind the fastest-growing competitors.
Technological and Financial Constraints: The company struggles with limitations in advanced technological resources and financial flexibility, which can impact expansion and modernization efforts.
Production Cost Challenges: Government-regulated pricing on natural gas sometimes results in losses due to production costs exceeding sale prices.
Dependence on Domestic Market: Heavy reliance on India’s market exposes ONGC to domestic economic and policy risks.
Aging Infrastructure and Workforce Issues: Some infrastructure is outdated and there is a relatively high attrition rate, which necessitates higher investment in training and modernization.