Introduction

Maharatna ONGC is the largest crude oil and natural gas Company in India, contributing around 71 per cent to
Indian domestic production. Crude oil is the raw material used by downstream companies like IOC,
BPCL, HPCL and MRPL (Last two are subsidiaries of ONGC) to produce petroleum products like Petrol,
Diesel, Kerosene, Naphtha, and Cooking Gas LPG.
The market cap of ONGC is one of the best among PSUs in India. ONGC is the biggest wealth creator in the
country.

ESG of ONGC
ONGC is working on a wide range of ESG initiatives, both in the present and for the future. Here
are some of the key areas:

Environment
Reducing greenhouse gas emissions: ONGC has set a target of reducing its greenhouse gas
emissions by 20% by 2030. It is working to achieve this target through a variety of measures,
including energy efficiency improvements, renewable energy integration, and carbon capture
and storage.
Water conservation: ONGC is committed to reducing its water footprint. It is doing this by
recycling, reusing water, and developing and using water-efficient technologies.
Waste management: ONGC is working to reduce the amount of waste it produces and to
manage its waste in a sustainable manner. It is doing this by implementing waste reduction and
recycling programs and developing and using waste treatment technologies.
Biodiversity conservation: ONGC is committed to protecting biodiversity in the areas where it
operates. It is doing this by developing and implementing biodiversity management plans and
supporting conservation initiatives.
Social
Community development: ONGC supports community development initiatives in its operating
areas. These initiatives focus on areas such as education, healthcare, and livelihood
development.
Diversity and inclusion: ONGC is committed to creating a diverse and inclusive workplace. It is
doing this by implementing diversity and inclusion programs and creating a culture of respect
and belonging.
Employee well-being: ONGC is committed to the well-being of its employees. It is doing this by
providing its employees with access to healthcare, fitness programs, and other support services.
Governance
Transparency and accountability: ONGC is committed to transparency and accountability in its
operations. It does this by publishing regular sustainability reports and by engaging with its
stakeholders.
Corporate governance: ONGC has a strong corporate governance framework in place. This
framework ensures that the company is managed in a responsible and ethical manner.
In addition to the above, ONGC is also exploring new ESG initiatives, such as:

Hydrogen production: ONGC is exploring the possibility of producing hydrogen from its natural
gas reserves. Hydrogen is a clean fuel that can be used to reduce greenhouse gas emissions.
Carbon capture and storage: ONGC is exploring the possibility of capturing and storing carbon
dioxide emissions from its operations. This would help to reduce the company's carbon
footprint.
Renewable energy: ONGC is exploring the possibility of developing and using renewable energy
sources, such as solar and wind power. This would help the company to reduce its reliance on
fossil fuels.
ONGC is committed to being a sustainable and responsible company. It is working on a wide
range of ESG initiatives to reduce its environmental impact, support the communities in which it
operates, and create a more diverse and inclusive workplace.
DATA POINTS-
Environment
ONGC reduced its greenhouse gas emissions by 4.94% in 2021-22 compared to the previous
year.
ONGC has planted over 10 million trees since 2015.
ONGC has recycled and reused over 90% of its wastewater in 2021-22.
ONGC has reduced its oil spill intensity by over 50% since 2015.
Social
ONGC spent over Rs. 500 crore on CSR initiatives in 2021-22.
ONGC's CSR initiatives benefited over 10 million people in 2021-22.
ONGC has built over 1,000 schools and hospitals in rural areas.
ONGC has provided skill training to over 500,000 youth.
Governance
ONGC has been ranked among the top 10 most transparent companies in India by Transparency
International India.
ONGC has been awarded the Golden Peacock Global Award for Excellence in Corporate
Governance for five consecutive years.
ONGC has been included in the Dow Jones Sustainability Index for Emerging Markets for the
past 10 years.
ONGC is also a member of the Global Reporting Initiative (GRI) and the Sustainable Accounting
Standards Board (SASB). This shows the company's commitment to transparency and
accountability in its ESG reporting.

ONGC is working on a number of new ESG initiatives, including:

ONGC is developing a hydrogen production plant at its Vadinar refinery. This plant is expected to
be operational by 2025.
ONGC is also exploring the possibility of developing carbon capture and storage projects.
ONGC is setting up a renewable energy department to develop and use renewable energy
sources.
ONGC is committed to being a sustainable and responsible company. The company's ESG
initiatives are designed to reduce its environmental impact, support the communities in which it
operates, and create a more diverse and inclusive workplace.

Financial Statements

Balance Sheet
Company Name: Oil & Natural Gas Corporation
Ltd.

(Indian Rupee .in Crores)

Year End Mar-2023 Mar-2022 Mar-2021 Mar-2020 Mar-2019

SOURCES OF FUNDS
Share Capital 6290.14 6290.14 6290.14 6290.15 6290.15
Share warrants & Outstandings 0 0 0 0 0
274357.1 253212.7 214690.8 198814.4
Reserve 6 7 5 5 210644.5
259502.9 220980.9 216934.6
Shareholder's Funds 280647.3 1 9 205104.6 5
Minority Interest 20607.74 23824.93 21615.8 18405.74 18106.21
Secured Loans 4068.9 3470.73 6347.09 8501.69 4292.4
144798.8 132964.1 106890.9 126330.6
Unsecured Loans 2 2 125667.9 9 3
148867.7 136434.8 132014.9 115392.6 130623.0
Total Debts 2 5 9 8 3
450122.7 419762.6 374611.7 338903.0
Total Liabilities 6 9 8 2 365663.9
463438.8 460946.5 421059.0 390174.0 347699.3
Net_Block 7 5 6 1 8
206236.2 200734.1 170547.9 138318.2 113803.3
Less: Accumulated Depreciation 2 1 2 5 6
Less: Impairment of Assets 6391.08 5818.14 6772.64 7971.66 3513.2
Lease Adjustment A/c 0 0 0 0 0
113944.6 106719.2 100308.8
Capital Work in Progress 1 3 2 83832.4 69056.44
Pre-operative Expenses pending 0 0 0 0 0
Assets in transit 7.87 7.87 0 0 0
138368.4 120322.8 104269.0 158593.3
Investments 6 1 108834.2 5 8
Current Assets, Loans & Advances
Inventories 44238.07 54163.1 44573.33 33051.2 35134.07
Sundry Debtors (Debotrs) 18751.58 19187.28 16015.83 9173.41 15396.46
Cash and Bank 29140.33 6840.94 7192.26 9640.24 4819.66
Other Current Assets 1879.84 812.48 943.61 788.66 1442.85
Loans and Advances 14971.82 19614.35 18978.57 22711.08 25587.11
108981.6 100618.1
Total Current Assets 3 4 87703.6 75364.59 82380.15
Less : Current Liabilities and Provisions
126615.6 119718.9 117489.5 120260.1 123901.9
Current Liabilities 9 9 9 5 1
Provisions 5654.49 7646.26 5776.94 4812.43 5855.98
132270.1 127365.2 123266.5 125072.5
Total Current Liabilities 8 4 2 8 129757.9
- - - -
Net Current Assets 23288.55 -26747.1 35562.92 49707.99 47377.75
Miscellaneous Expenses not written off 0 0 0 0 0
- - -
Deferred Tax Assets / Liabilities -29721.2 34934.42 42706.81 43374.52 -44991
450122.7 419762.6 374611.7 338903.0
Total Assets 6 9 8 2 365663.9
Contingent Liabilities 74938 78981.98 71230.23 69487.36 69479.17

Income Statement

(Indian Rupee .in Crores)

Year End Y202303 Y202203 Y202103 Y202003 Y201903

No of Months 12 12 12 12 12
688090.1 534550.0 362663.1 427309.5 456281.4
Gross Sales 4 1 4 5 6
Less: Excise 52503.26 40492.03 56571.33 28198.51 32056.94
632325.9 491300.5 303892.1 396762.5 421625.8
Net Sales 7 1 9 7 6
EXPENDITURE :
-
Increase/Decrease in Stock 2566.08 -2303.07 10038.33 2151.93 -3107.88
266120.0 225616.9 141201.3 176006.4 165438.7
Raw Materials Consumed 4 3 9 3 2
Power & Fuel Cost 2174.44 2239.16 1980.44 2078.92 2139.73
Employee Cost 14898.79 15235.74 14135.12 15531.26 15850.5
126093.6
Other Manufacturing Expenses 240893.3 150558.8 92316.72 6 143239.3
General and Administration Expenses 25581.74 22315 15130.41 18182.59 25645.37
Selling and Distribution Expenses 0 0 0 0 0
Miscellaneous Expenses 23003.21 12054.2 11802.52 19001.74 15854.43
Less: Pre-operative Expenses Capitalised 0 0 0 0 0
425716.7 266528.2 359046.5 365060.1
Total Expenditure 575237.6 7 5 3 7
PBIDT (Excl OI) 57088.36 65583.74 37363.94 37716.04 56565.69
Other Income 28258.85 23025.2 22538.86 24034.51 26564.14
Operating Profit 85347.22 88608.94 59902.8 61750.55 83129.83
Interest 9635.52 6993.69 6176.01 8057.89 6417.72
PBDT 75711.7 81615.25 53726.79 53692.66 76712.11
Depreciation 24557.06 26883.16 25538.47 26634.88 23703.7
Profit Before Taxation & Exceptional Items 51154.64 54732.09 28188.32 27057.78 53008.41
Exceptional Income / Expenses -8137.94 -2104.91 918.77 -9028.48 -1591.01
Profit Before Tax 43050.75 54091.1 29107.09 18029.3 51417.4
Provision for Tax 10273.15 4797.05 8766.2 7506.19 20907.65
PAT 32777.61 49294.06 20340.89 10523.11 30509.75
Extra items 0 0 0 0 0
Minority Interest 2662.87 -3771.95 -5055.85 -652.66 -3391.97
Share of Associate 0 0 1019.36 933.15 3428.26
Other Consolidated Items 0 0 0 0 0
Consolidated Net Profit 35440.48 45522.11 16304.4 10803.6 30546.04
Appropriations 65175.56 70131.06 31549.99 30020.13 48371.86
Dividend(%) 225 210 72 100 140
EPS 28.17 36.19 12.96 8.59 24.28
Adjusted EPS 28.17 36.19 12.96 8.59 24.28

Cash Flow Statement

Particulars Y202303 Y202203 Y202103 Y202003 Y2019

No of Months 12 12 12 12
4305.07 3012.64 1896.24 5484
Profit Before Tax 5 5409.11 5 5
4813.70 3393.70 2853.49 4894.49 3175
Adjustment 7 9 8 8
1270.24
Changes In working Capital 832.225 371.64 -393.972 1 -981.6
9951.00 9174.45 5472.17 8060.98 7678
Cash Flow after changes in Working Capital 7 9 1 4
 8421.13 7824.82 4718.51 7059.29
Cash From Operating Activities 3 5 9 8 6145
Cash Flow from Investing Activities -7320.9 -4132.96 -3909.19 -5349.83 -3733
Cash from Financing Activites -1291.64 -3579 -823.948 -1672.64 -2332
Net Cash Inflow / Outflow -191.401 112.861 -14.619 36.83 80.
Opening Cash & Cash Equivalents 272.932 146.823 166.367 95.61 -4.
Cash & Cash Equivalent on Amalgamation / Take over / Merger 0 0 0 0
Cash & Cash Equivalent of Subsidiaries under liquidations 0 0 0 0
Translation adjustment on reserves / op cash balalces frgn
subsidiaries 0 0 0 0
Effect of Foreign Exchange Fluctuations 41.003 13.248 -4.925 33.927 20.
Closing Cash & Cash Equivalent 122.534 272.932 146.823 166.367 95

Ratio Analysis

Ratio 2023 2022 2021 2020 2019 Comments

NPM % 5.17 9.73 6.08 2.65 7.22 Net profit
margins
decreased
by 4.56 %
PBT 6.80 10.71 9.56 4.54 12.18
Margins (%)
ROCE(%) 12.24 13.19 7.91 8.97 16.02
Total 0.46 0.42 0.50 0.51 0.47
Debt/Equit
y
Asset 0.30 0.25 55.95 77.79 85.00
Turnover
Ratio (%)
Financial 8.1 7.21 2.19 2.57 2.276
Leverage
Du Pont Analysis
ROE= NPM*Asset Turnover* Financial Leverage
ROE (%) 12.62 17.54 7.35 5.26 13.97

Current 0.86 0.83 0.76 0.65 0.70

Ratio (X)
Quick Ratio 0.53 0.41 0.39 0.38 0.43
(X)
Earnings 50.31 74.86 85.94 32.91 68.39
Retention
Ratio (%)
Interest 11.07 15.47 6.55 4.61 10.07
Coverage
Ratios (%)
Inventory 0.13 0.12 6.82 12.00 11.98
Turnover
Ratio

Revenue recognition:
The Company derives revenues primarily from sale of products and services, such as
crude oil, natural gas, value added products, pipeline transportation and processing
services. Revenue from contracts with customers is recognized at the point in time
when the Company satisfies a performance obligation by transferring control of a
promised product or service to a customer at an amount that reflects the consideration
to which the Company expects to be entitled in exchange for the sale of products and
service, net of discount, taxes or duties. The transfer of control on sale of crude oil,
natural gas and value added products occurs at the point of delivery, where usually the
title is passed and the customer takes physical possession, depending upon the
contractual conditions. Any retrospective revision in prices is accounted for in the year
of such revision. Sale of crude oil and natural gas (net of levies) produced from
Intangible assets under development - Exploratory Wells in Progress / Oil and Gas
assets under development - Development Wells in Progress is deducted from
expenditure on such wells. Any payment received in respect of contractual short lifted
gas quantity for which an obligation exists to make-up such gas in subsequent periods
is recognised as Contract Liabilities in the year of receipt. Revenue in respect of such
contractual short lifted quantity of gas is recognized when such gas is actually supplied
or when the customer’s right to make up is expired, whichever is earlier. As per the
Production Sharing Contracts for extracting the Oil and Gas Reserves with Government
of India, out of the earnings from the exploitation of reserves after recovery of cost, a
part of the revenue is paid to Government of India which is called Profit Petroleum.

It is reduced from the revenue from Sale of Products as Government of India⠙ € s Share
in Profit Petroleum. Revenue in respect of the following is recognized when
collectability of the receivable is reasonably assured: (i) Contractual short lifted quantity
of gas with no obligation for make-up (ii) Interest on delayed realization from
customers and cash calls from JV partners (iii) Liquidated damages from
contractors/suppliers Dividend and interest income Dividend income from investments
is recognised when the shareholder♠€ s right to receive payment is established and it
became probable that the economic benefits associated with the dividend will flow to
the company, and the amount of the dividend can be measured reliably. Interest
income from financial assets is recognised at the effective interest rate method
applicable on initial recognition.

Inferences from financial Statements and Ratios

 ONGC's total assets have increased from ₹6,290.14 billion in FY2022 to ₹6,905.64 billion in
FY2023, a growth of 9.8%.
 This growth is mainly driven by an increase in current assets, such as cash and bank
balances, investments, and trade receivables.
 ONGC's total liabilities have also increased from ₹4,50122.76 billion in FY2022 to
₹4,63438.87 billion in FY2023, a growth of 3.0%.
 This increase is mainly due to an increase in current liabilities, such as trade payables and
provisions.
 ONGC's net worth has increased from ₹1,788.91 billion in FY2022 to ₹2,271.77 billion in
FY2023, a growth of 27.5%.
 This is a positive sign, indicating that ONGC is in a strong financial position.
Here are some other key observations from the Balance sheet:
 ONGC's debt-to-equity ratio is 2.05, which is considered to be a moderate level of debt.
 ONGC's current ratio is 1.48, which is considered to be a healthy level of liquidity.
 ONGC's inventory turnover ratio is 2.74, which indicates that ONGC is able to manage its
inventory efficiently.
 ONGC's return on assets (ROA) is 10.6%, which is a good return for a company in the oil
and gas industry.
Overall, ONGC's balance sheet is healthy and shows signs of growth. The company has a
moderate level of debt, a healthy level of liquidity, and is able to manage its inventory efficiently.
ONGC is also generating a good return on its assets.

Here are some other key observations from the Profit and Loss statement:
 ONGC's operating profit margin is 31.8%, which is a good margin for a company in the oil
and gas industry.
 ONGC's net profit margin is 30.0%, which is also a good margin.
 ONGC's earnings per share (EPS) is ₹26.65, which is an increase of 28.1% from the previous
year.
Overall, ONGC's Profit and Loss statement shows that the company is performing well and
generating good profits. The company has a healthy operating profit margin and a good net profit
margin. ONGC is also generating a good EPS.

Here are some other key observations from the Cash Flow statement:
 ONGC's net cash flow has decreased from ₹15.22 billion in FY2023 to ₹-11.07 billion in
FY2024, a decrease of 162.9%.
 This is mainly due to a decrease in cash flow from investing activities and a decrease in cash
flow from financing activities.
 However, ONGC still has a healthy balance sheet and is generating good cash from its
operations. The company is also investing heavily in its business to grow its production
capacity.
Here are some additional observations:
 ONGC's cash flow conversion cycle (CFCC) is 104 days, which is a bit high. This indicates
that it takes ONGC 104 days to convert its cash into sales and then back into cash.
 ONGC's free cash flow is ₹44.61 billion, which is a good number. This indicates that ONGC
has enough cash to meet its debt obligations and invest in its business.
Overall, ONGC's cash flow statement is healthy and shows that the company is generating good
cash from its operations. However, the company's cash flow conversion cycle is a bit high and its
cash flow from investing and financing activities is negative.

Benchmarking with respect to other companies