Oil and Natural Gas Corporation Limited

Energy — Oil & Gas Integrated · NSE

₹222.00−₹2.64 (−1.18%)

DalalBaazaar Score

61 / 100

🟢 Good

Verdict

NEUTRAL

Risk

Low

Driven by short-term liabilities exceed short-term assets.

In simple words: Reasonable but unspectacular business quality, with both sales and profits growing well. Short-term liquidity is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:07 pm

Constructive picture on fundamentals. Profitability, leverage and growth metrics are broadly healthy on this snapshot. That said, valuation should still be checked against direct sector peers (not just the generic P/E bands used here) before treating this as a buy signal.

Understanding the Business

Company site ↗

The 60-second version of Oil and Natural Gas Corporation Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Oil and Natural Gas Corporation Limited, together with its subsidiaries, engages in the exploration, development, and production of crude oil, natural gas, and value-added products in India and internationally.

IndustryOil & Gas Integrated

SectorEnergy

Employees23,117

Annual revenue₹6.05 L Cr

How does it make money?

Turns over ₹6.05 L Cr a year. Of every ₹100 of sales, about ₹7 reaches shareholders as profit, with ₹21 left at the operating level before interest, tax and depreciation. Each of its 23,117 employees supports ₹26.18 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin21.3%

Net margin6.8%

Revenue / employee₹26.18 Cr

Who are its competitors?

The closest listed comparisons in its industry are RELIANCE INDUSTRIES LTD, BHARAT PETROLEUM CORP LT, INDIAN OIL CORP LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

RELIANCE INDUSTRIES LTDP/E 21.9x · ROE 8.3%

BHARAT PETROLEUM CORP LTP/E 7.3x · ROE 17.1%

INDIAN OIL CORP LTDP/E 5.3x · ROE 15.4%

What is its competitive advantage?Little sign of one

Returns on capital of 12.6% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

ROCE12.6%

ROE11.1%

Peer median ROE15.4%

What is the outlook?

20 analysts covering the stock expect revenue to shrink about 6.3% and earnings to fall about 4.4% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth-6.3%

Est. earnings growth-4.4%

Analysts20

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -4% while net margin moved +17% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect-4%

Margin effect+17%

DalalBaazaar Score

61/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 1.3% a year
✗ Profit CAGR of only 4.1%

Quality vs. Valuation

Company Quality

53/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

75/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

6.4x

3Y Median

8.1x

40 monthly readings · mean 7.8x · range 5.8x–11.5x

Sector Median

7.3x

median of 3 sector peers

🟢Current valuation is approximately 21% below its 3y median of 8.1x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟡Against its sector it is priced broadly in line with the peer median of 7.3x.

vs. its own history

Cheap

8.1x median over 40 months · -21%

vs. sector peers

Fair

7.3x median of 3 peers · -12%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

6.4x

P/B

0.75x

EV/EBITDA

3.5x

PEG

1.56

Dividend Yield

6.53%

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 15.4% to 21.3% over 3 years.
Cash generation is improving
Free cash flow is up 67% over 3 years.
Return on capital is rising
ROCE has improved from 10.2% to 12.6%.
Valuation below its historical average
At 6.4x the stock trades 21% below its own median of 8.1x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention3

Receivables growing faster than sales
Receivables are up 18% against revenue growth of -4% — customers are taking longer to pay.
Inventory building faster than sales
Inventory is up 41% against revenue growth of -4% — stock may not be moving.
Short-term liquidity is tight
Current ratio of 0.84 — near-term obligations exceed near-term assets.

Red Flags

3 items require attention · 3 watch

🟡Receivables growing faster than salesFinancial
Receivables up 18% against revenue up -4% — sales are being booked faster than they are collected.
🟡Inventory building faster than salesFinancial
Inventory up 41% against revenue up -4% — stock may not be moving.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.84 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 15.4% to 21.3%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 21% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹58,729 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 18% against revenue up -4%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 19%✓ 21.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✓ ₹58,729 Cr
Profit that never becomes cash eventually stops being profit.
3Debt / EBITDA stays below 2x✓ 1.4x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4ROCE stays above 10%✓ 12.6%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Interest cover stays above 4x✓ 7.3x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

7 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✗ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

9 good · 2 neutral · 0 weak

Market Cap

₹2.79 L Cr

Large Cap

Large, widely-covered business — typically the steadiest of the bands

P/E (Trailing)

6.4x

Cheap

Cheap against the generic band

P/B Ratio

0.75x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹34.6

Profitable

Profitable on a per-share basis

ROE

11.1%

Moderate

Moderate capital efficiency

ROCE

12.6%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.43x

Low

Conservative leverage

Revenue Growth (YoY)

25.7%

Healthy

Healthy top-line growth

Profit Growth (YoY)

21.4%

Healthy

Profits growing at a healthy clip

Dividend Yield

6.53%

Healthy

Meaningful cash return while you hold the stock

Free Cash Flow

₹58,729 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹222

P/E (Forward)

5.3x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

2.9%

Weak

Thin margins leave little room for error

Net Margin

6.2%

Average

Average bottom-line conversion

Current Ratio

0.84

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.16

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

227.6 / 232.7

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

28.9

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹6.30 L Cr	₹5.99 L Cr	₹6.09 L Cr	₹6.05 L Cr	-1.3%
EBITDA	₹97,122 Cr	₹1.24 L Cr	₹1.11 L Cr	₹1.29 L Cr	+9.9%
EBITDA Margin	15.4%	20.8%	18.2%	21.3%	—
PAT (Net Profit)	₹36,709 Cr	₹49,144 Cr	₹36,226 Cr	₹41,424 Cr	+4.1%
EPS	₹29.18	₹39.06	₹28.8	₹32.93	+4.1%
ROE	12.9%	14.5%	10.5%	11.1%	—
ROCE	10.2%	14.9%	11.5%	12.6%	—
Total Debt	₹1.77 L Cr	₹1.91 L Cr	₹2.19 L Cr	₹1.74 L Cr	-0.5%
Free Cash Flow	₹35,132 Cr	₹46,728 Cr	₹35,181 Cr	₹58,729 Cr	+18.7%

🟡 Revenue has been broadly flat over 3 years (-1.3% a year).

🟢 EBITDA has grown at 9.9% a year over 3 years.

🟢 EBITDA Margin has risen from 15.4% to 21.3% over 3 years (+5.9 pts).

🟢 PAT (Net Profit) has grown at 4.1% a year over 3 years.

🟢 EPS has grown at 4.1% a year over 3 years.

🔴 ROE has fallen from 12.9% to 11.1% over 3 years (-1.8 pts).

🟢 ROCE has risen from 10.2% to 12.6% over 3 years (+2.4 pts).

🟡 Total Debt has been broadly flat over 3 years (-0.5% a year).

🟢 Free Cash Flow has grown at 18.7% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹7.92 L Cr

Total Liabilities

₹3.82 L Cr

Total Debt

₹1.74 L Cr

Cash & Equivalents

₹1,278 Cr

Operating Cash Flow

₹1.13 L Cr

Capex

-₹53,990 Cr

Shareholding (proxy)

Institutional Holding

22.4%

Insider Holding

69.2%

Corporate Actions

Next Earnings

06 Nov 2026

Dividend Rate

₹14.5

Ex-Dividend Date

04 Sept 2026

Analyst Consensus

Recommendations

22 Buy · 4 Hold · 4 Sell

Target Price (Mean)

₹292.93

+32.0% vs CMP

Target Range

₹210 – ₹405

Peer Comparison

Company	P/E	ROE
RELIANCE INDUSTRIES LTD	21.9x	8.3%
BHARAT PETROLEUM CORP LT	7.3x	17.1%
INDIAN OIL CORP LTD	5.3x	15.4%

Recent News

2 mixed4 general

The Oil Price Link Investors Must Untangle: What the Production Volumes Test Really Reveals

Kalkine India, 16 Oct

Oil & Natural Gas Corporation Ltd. (ONGC) 52 Week Low Streak: Sixth Straight Session Near Yearly Low

Univest, 08 Oct

ONGC Outlook for the Week

Equitypandit, 09 Oct

Mangalore Refinery and Petrochemicals share price plunges 7% despite strong Q2 results | What should investors do?

Livemint, 15 OctPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Oil and Natural Gas Corporation shares fall 2.11 percent in early trade

Moneycontrol.com, 27 JulPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

ONGC strikes gas at deepwater well in Mahanadi offshore Basin; what investors need to know

Upstox, 21 Sept

Watch Items

Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

🟡Business QualityAdequate11.8/20

🟢Financial HealthStrong14.6/20

🔴GrowthWeak4.8/20

🟡ProfitabilityModerate8.3/15

🟢ValuationAttractive12.8/15

🟢RiskLow8.4/10

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you.

This thesis breaks if

✓EBITDA margin holds above 19%21.3%
✓Free cash flow remains positive₹58,729 Cr
✓Debt / EBITDA stays below 2x1.4x
✓ROCE stays above 10%12.6%
✓Interest cover stays above 4x7.3x