New Delhi: Oil and Natural Gas Corporation (ONGC) is expected to witness a strong earnings recovery over the next six to nine months, supported by elevated crude oil prices and improving performance at its refining subsidiaries, according to S&P Global Ratings. The ratings agency expects ONGC's consolidated EBITDA to increase by 15–20 per cent to ₹1.3 lakh crore–₹1.4 lakh crore in FY27.
Higher Crude Prices To Support ONGC Earnings
S&P Global expects ONGC's upstream oil and gas operations to remain the primary growth driver. The company is projected to maintain quarterly domestic production of approximately 10 million tonnes of oil equivalent, generating EBITDA of ₹25,000 crore–₹30,000 crore. The agency estimates Brent crude prices will average $95 per barrel during the remainder of 2026 before declining to $80 in 2027.
HPCL And MRPL Drive Refining Recovery
ONGC's downstream subsidiaries, Hindustan Petroleum Corporation Limited (HPCL) and Mangalore Refinery and Petrochemicals Limited (MRPL), are also showing signs of recovery. Their combined EBITDA reached ₹12,000 crore in the September quarter, compared with a negative ₹17,500 crore in the preceding quarter. S&P expects improved refining margins and reduced losses at HPCL to support downstream EBITDA of approximately ₹17,000 crore in FY27.
ONGC Cash Flow Outlook
Despite stronger profitability, ONGC's consolidated operating cash flow could decline to ₹75,000 crore–₹80,000 crore in FY27 from ₹1.1 lakh crore in FY26. Higher working capital requirements, particularly due to elevated crude oil and fuel prices, are expected to pressure cash generation.
However, ONGC's funds-from-operations-to-debt ratio could improve to approximately 60 per cent over the next 12–24 months. This would provide a comfortable cushion above S&P's 40 per cent benchmark for its BBB+ standalone credit profile.
S&P clarified that its report does not represent a rating action. ONGC's ratings remain constrained by India's sovereign credit ratings.
