New Delhi: Oil and Natural Gas Corp. Ltd (ONGC), India’s biggest oil explorer, on Thursday said first quarter net profit rose 12% from the year earlier on higher crude oil prices.
Profit rose to Rs 4,095 crore in the three months ended 30 June, the company said in a statement. Sales gained 18.7% to Rs 16,268 crore.
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That compares with the Rs 4,427.8 crore average estimate of 21 analysts compiled by Bloomberg. Analysts expected sales at Rs 17,156.56 crore.
The company’s net realization per barrel of crude produced was $48.76, a 1.5% increase over the year earlier period.
The company’s realizations on oil sold were expected to improve in the coming quarters as its subsidy burden will come down after a substantial hike in diesel prices in June, said ONGC’s chairman A.K. Hazarika while announcing the earnings.
Oil and gas producers such as ONGC partly subsidize the cost of fuel sold by state-run oil marketing companies to consumers.
To ease the so-called under-recoveries—or selling fuel below cost—faced by oil marketers on increasing global crude prices, the government raised the price of diesel in June by Rs 3 per litre and had halved the import duty levied on its sale to 2.5%.
The subsidy burden that ONGC bore during the first quarter more than doubled to Rs 12,046 crore from Rs 5,515 crore a year earlier.
“The results were largely in line with our estimates,” said Alok Deshpande, oil and gas sector analyst at Elara Securities (India) Ltd. “With the price hike and duty cuts in June, we expect ONGC’s net realization at $55 per barrel for the next quarter.”
ONGC’s share price gained 0.09% on the Bombay Stock Exchange on Thursday to close at Rs 276.65. The exchange’s benchmark index, the Sensex, lost 1.21% to close at 18,209.52. The company’s results were announced after the close of trading.
Reuters contributed to this story.