ONGC Earnings May Jump 20% To ₹1.4 Lakh Crore In FY27, S&P Global Sees Strong Recovery In Oil And Refining Business

New Delhi: Oil and Natural Gas Corporation (ONGC) is projected to experience a robust earnings boost in the upcoming six to nine months, according to S&P Global Ratings. The agency anticipates ONGC's consolidated EBITDA to rise by 15-20 percent, reaching ₹1.3 lakh crore to ₹1.4 lakh crore for FY27. Elevated crude oil prices and improved performance from ONGC's refining subsidiaries are cited as the primary contributors to this anticipated growth.

S&P Global highlights upstream oil and gas operations as the main driver of ONGC's earnings recovery. The company is set to maintain its domestic production at around 10 million tonnes of oil equivalent per quarter, leading to EBITDA of ₹25,000 crore to ₹30,000 crore. Brent crude prices are expected to average $95 per barrel during the latter part of 2026, before dipping to $80 in 2027.

ONGC's downstream subsidiaries, Hindustan Petroleum Corporation Limited (HPCL) and Mangalore Refinery and Petrochemicals Limited (MRPL), are also showing signs of improvement. Their combined EBITDA reached ₹12,000 crore in the September quarter, marking a stark contrast to the negative ₹17,500 crore reported in the previous quarter. S&P anticipates enhanced refining margins and reduced losses at HPCL to bolster downstream EBITDA to approximately ₹17,000 crore in FY27.

In addition to its strategic investments, ONGC has formed a ₹50 crore joint venture with MRPL and OPaL. Despite this positive outlook, ONGC's consolidated operating cash flow may contract to ₹75,000 crore to ₹80,000 crore in FY27, down from ₹1.1 lakh crore in FY26. This decline is attributed to higher working capital needs, mainly driven by elevated crude oil and fuel prices.

However, ONGC's funds-from-operations-to-debt ratio is projected to improve to roughly 60 percent over the next 12-24 months, providing a robust cushion above S&P's 40 percent benchmark for its BBB+ standalone credit rating.