The shares of Oil and Natural Gas Corporation (ONGC) dropped nearly 2 percent on May 22 after the company released its results for the fourth quarter of the financial year 2025. The shares of the company were hovering around Rs 244 apiece in the early trading hours.

The oil major released its Q4 FY25 results in the post-market hours of May 21. The company reported a net profit of Rs 8,856.33 crore for the quarter under review. This marked a drop of over 20 percent from the Rs 11,096.03 crore net profit reported in the corresponding quarter of the previous financial year.

ONGC's revenue from operations slightly fell to Rs 1.7 lakh crore in Q4 FY25, as against Rs 1.72 lakh crore in the year-ago period. The company also reported a standalone crude oil production of 4.70 million metric tonne (mmt) while gas production in the period was 4.893 billion cubic metres (BCM).

Along with the Q4 results, ONGC also announced a final dividend of Rs 1.25 per equity share for the financial year 2025.

For the entire financial year 2025, the oil major declared a total of 9 discoveries (5 in onland and 4 in offshore) in its operated acreages. Out of these, 7 are prospects (4 onland and 3 offshore) and 2 (1 in onland and 1 in offshore) are new pool discoveries.

The company invested around Rs 62,000 crore in capital expenditure in FY25, including Rs 18,365 crore in OPaL, Rs 4,600 crore in ONGC Green Ltd for the acquisition of PTC Energy and Ayana Renewables.

CLSA on ONGC:

Despite the fall in net profit, CLSA remained bullish on the stock. The international brokerage maintained a 'High Conviction Outperform' call for the stock, with a target price of Rs 360 per share. This implies an upside potential of nearly 47.5 percent from the stock's current market price.

CLSA noted that the reported profit after tax was significantly lower than forecast, largely due to a big drywell write-off recognized in Q4. It also highlighted that the company's standalone oil and gas production rose 5 percent and 4 percent, respectively, on the back of rising output from the KG-98/2 field.

CLSA further said that ONGC's gas price realization rose by 4 percent QoQ, helped by the increasing share of new well gas in its output.

Jefferies on ONGC:

Jefferies kept a 'Buy' call on the stock, with a target price of Rs 375 apiece. This implies an upside potential of nearly 54 percent from the stock's current market price.

The international brokerage said that Q4 standalone EBITDA was marginally below its estimate, but production and realization were more or less in line. Profit after tax was 31 percent below its estimate, on account of higher exploratory well write-offs.

Jefferies also noted that daily crude and gas production has risen for the second successive quarter.

Motilal Oswal on ONGC:

Motilal Oswal Financial Services also maintained a 'Buy' rating on ONGC. The domestic brokerage noted that the oil major's crude oil and gas sales were higher than its estimates. "Higher-than-estimated DDA, dry well write-offs, and survey costs, along with lower-than-estimated other income, led to a miss on PAT," it said.