ONGC stock: Motilal Oswal sees upside despite production drag

Published on 11/11/2026 at 10:44 | Editorial responsibility: Rafael Müller, Editor-in-Chief AD HOC NEWS

ONGC stock retains a broker-backed recovery case after the September quarter. Offshore projects and new wells remain central to the outlook.

Production recovery remains central

Motilal Oswal kept its Buy view after ONGC's September-quarter results.
Western offshore projects, Mumbai High interventions and planned gas-well connections form the main recovery catalysts.
Lower production forecasts and deepwater-rig availability remain key risks for investors.

ONGC, INE213A01029, Illustration mit AI erstellt.

Motilal Oswal Financial Services retained its Buy recommendation on Oil and Natural Gas Corporation after the company's July-to-September 2026 results. The broker's November 7 update, summarized by DSIJ, balances low valuation and project potential against persistent production pressure.

Results show stronger realizations

ONGC's standalone revenue in the second quarter of fiscal 2027 was about INR 43,900 crore, in line with the broker's estimate. Crude oil and gas sales were both below the forecast by 4%, while oil realization reached USD 92.3 per barrel against an estimate of USD 90.

According to the DSIJ summary, the stronger realization, lower statutory levies and other items supported an earnings performance above Motilal Oswal's expectations at the operating and standalone profit levels. The board also approved an interim dividend of INR 8 per share.

Projects target output recovery

Production remains the main constraint. Crude oil output fell 5% year over year in the quarter, while natural gas production declined 2%. Reservoir complexities at KG-DWN-98/2, monsoon-related delays and weaker onshore gas offtake affected volumes.

Motilal Oswal expects ONGC's fiscal 2027 production to reach about 39 million metric tons of oil equivalent, with only 0.5 million to 1 million metric tons of growth projected for fiscal 2028. The broker consequently lowered its production and EBITDA estimates, keeping volume execution at the center of the investment case.

Two western offshore development awards carry combined capital expenditure of about INR 11,800 crore and an estimated hydrocarbon potential of 22 million metric tons of oil equivalent. A separate subsea-pipeline replacement program involves more than INR 4,300 crore. The technical-service-provider program at Mumbai High has also shown early results, although the gains have not been quantified.

Key risks remain visible

Further catalysts include a gas-bearing Mahanadi deepwater well and planned connections of three KG-DWN-98/2 gas wells in the fourth quarter of fiscal 2027. Motilal Oswal also highlighted the risk that deepwater-rig availability could delay exploration plans and that continued production weakness could limit the recovery thesis.