ONGC embodies value with its massive scale, high dividend yields, and undervalued multiples, trading at 8x P/E amid stable cash flows from...
ONGC embodies value with its massive scale, high dividend yields, and undervalued multiples, trading at 8x P/E amid stable cash flows from 71% domestic crude dominance. Oil India counters with growth momentum, boasting superior ROE, production ramps, and refinery upside, delivering 48% 3Y CAGR despite recent pullbacks. In this showdown, Oil India's trajectory edges for long-term compounding, but ONGC wins for income-focused stability.
Core Profiles
ONGC (₹2.91 lakh Cr mcap, ₹231/share as of Jan 8, 2026) leads upstream E&P across 26 basins, with KG-D6 revival and OVL international assets offsetting mature declines. Q3FY26 cons PAT ₹8,622 Cr (down 19% YoY, but EBITDA margins up to 56%), dividend ₹5/share; FY25 sales ₹6.12 lakh Cr. Oil India (₹69,220 Cr mcap, ₹409/share Jan 8) shines in NE India fields and Numaligarh refinery (9 mmpta expansion); Q1FY26 cons PAT ₹2,047 Cr flat YoY, standalone ₹813 Cr.
Financial Showdown
ONGC's scale yields ₹38,329 Cr FY25 PAT vs Oil India's ₹70,396 Cr (per share edge), but Oil India posts higher ROE (14.1% vs 13.8%) and sales CAGR (10%+). Debt low for both (ONGC 0.3x), P/B favors ONGC at 0.79x.
| Key Ratio | ONGC | Oil India |
|---|---|---|
| P/E (TTM) | 7.95-8.7 | 10.3-11.15 |
| Dividend Yield | 4.97-5.29% | 2.98% |
| ROE (3Y) | 13.8% | 14.1% |
| ROCE | 11.31% | Higher growth adj. |
| Debt/Equity | 0.3 | 0.6 |
| EPS FY25 (₹) | 28.8 | 43.3 |
Returns Track Record
Oil India's momentum prevails: 5Y CAGR 47.6% vs ONGC 30.2%; 3Y 48% vs 24%. YTD 2026: ONGC -3-5%, Oil India -12% on crude dip (Brent ~$75), but OIL rebounds faster on volumes. Dividends amplify: ONGC 37.9% payout (₹12.25/share), OIL 26.6% but rising.
Growth Drivers vs. Value Anchors
Oil India's Momentum: 10% production CAGR to 25 mmt oe, refinery EBITDA doubling, targets ₹547-719 (34-76% upside from ₹409); Numaligarh, KG exploration fuel 15-20% earnings growth. ONGC's Value: Defensive with ₹90K Cr FCF FY25, KG output doubling, targets ₹275-340 (19-47% from ₹231); undervalued at 7x amid subsidies easing. Risks: Crude <$70 hurts both, but ONGC's HPCL stake buffers; OIL riskier on execution.
Strategic Insights
Oil India wins for growth chasers (target 25%+ CAGR to 2030 via diversification), suiting 40% allocation in aggressive portfolios. ONGC triumphs for value/dividend plays (4.5% yield + 10% appreciation = 15% returns), ideal 60% weight in conservative energy bets. Hybrid: Buy OIL on dips <₹390, ONGC <₹220; hold 5-10Y with Brent hedges. Q4FY26 earnings (Feb) pivotal—watch gas realization hikes, capex. Oil India's edge sharpens in energy transition with cleaner gas focus.
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