Oil and Natural Gas Corporation Ltd (ONGC), India's prominent Maharatna public sector undertaking (PSU) and energy major, is embarking on an ambitious ₹2 lakh crore green transition. This significant investment aims to achieve Net Zero Scope-1 and Scope-2 emissions by 2038, signaling a major strategic shift even as the company maintains its foundational role in India's energy security.
ONGC is a cornerstone of India's hydrocarbon sector, responsible for over 60 percent of the nation's total hydrocarbon production. This includes approximately 70 percent of domestic crude oil output and more than 50 percent of natural gas production.
Ambitious Green Transition and Operational Scale
The company's planned ₹2 lakh crore investment underscores its commitment to sustainability. This green push will run concurrently with its robust core operations. In the fiscal year 2025 (FY25), ONGC's standalone crude oil production reached 18.558 million metric tonnes (MMT), with natural gas output at 19.654 billion cubic meters (BCM).
ONGC operates on a vast scale, encompassing 268 offshore installations, 69 drilling rigs, and an extensive pipeline network stretching over 25,500 kilometers. The company actively strengthens its resource base through continuous exploration, reporting 9 new hydrocarbon discoveries in FY25—5 onland and 4 offshore—and successfully monetizing 8 of these. Additionally, it secured 15 new contract areas under OALP Bid Round-IX, covering 82,560.26 square kilometers.
Financial Performance and Shareholder Returns
Financially, FY25 saw some headwinds due to softer crude oil prices. Standalone revenue experienced a marginal decline of 0.4 percent, totaling ₹1,37,846 crore. This was primarily attributed to a drop in crude realization to $76.9 per barrel from $80.8 in FY24. Consequently, net profit fell by 12.1 percent to ₹35,610 crore, although PBIDT margins remained strong at 54.9 percent.
The trend of revenue and profit decline continued into the first nine months of FY26 (9M FY26), with revenue down 6.1 percent year-on-year to ₹96,581 crore and net profit decreasing by 10 percent to ₹26,244 crore.
Robust Cash Flows Support Dividends
Despite these earnings pressures, ONGC's ability to generate strong cash flows remains a key financial strength. Net operating cash flow rose significantly to ₹73,010 crore in FY25, up from ₹65,335 crore in FY24. The company maintains a healthy balance sheet, characterized by a current ratio of 1.4:1, working capital of ₹15,088 crore, and cash and bank balances amounting to ₹15,495 crore, all while remaining debt-free.
This financial resilience underpins consistent returns to shareholders. In FY25, ONGC distributed ₹15,411 crore as dividends, representing a payout ratio of 43.27 percent. The company has already matched this amount in interim dividends during 9M FY26. With a dividend of ₹12.25 per share paid in FY24 and matched year-to-date in FY26, the stock offers a dividend yield of approximately 4.26 percent based on a share price of ₹287.50 as of Monday's closing. Earlier dividends included ₹11.25 in FY23, ₹10.5 in FY22, and ₹8.60 in FY21.
"ONGC's outlook remains closely tied to global crude prices and the broader policy environment, including potential government interventions such as windfall taxes," noted one analyst.
The company's diversified exposure through subsidiaries and strategic investments, including ONGC Videsh, HPCL, MRPL, and ONGC Petroadditions, further strengthens its market position and potential for future growth.