Shares of Oil and Natural Gas Corporation (ONGC) hit a more than a four-month high of Rs 143.20 in intraday trade on Tuesday after the oil explorer reported a standalone net profit of Rs 12,826 crore for the September quarter (Q2FY23). The state oil exploration and production company posted a profit of Rs 18,348 crore in the same period last year.

ONGC reported revenue of Rs 38,321 crore for the quarter. The realised price of crude oil was $95.5/barrel. After deducting windfall profits tax, the realised price is $72.2 per barrel. Natural gas realisations remained unchanged sequentially at $6.1/MMBtu (based on GCV). EBITDA for the quarter fell 27.5% quarter-on-quarter to Rs 18,812 crore.

However, brokerage firm Motilal Oswal Financial Services said the revenue was Rs 31,900 crore after windfall tax of Rs 6,450 crore, in line with our estimate.

The movement of oil prices is important to ONGC’s performance; move on. Currently, Brent crude is near $94/barrel. Domestic natural gas prices were raised in the semi-annual price hike in October. According to ICICI Securities, the current global oil and gas price trend bode well for ONGC.

During the quarter, however, the government imposed a windfall tax on domestic oil production. The windfall profits tax is reviewed every two weeks. This will reduce the overall monetisation level of the company. Moreover, the brokerage said in a note that sustainable low-volume growth remains a key issue that the company needs to address to create shareholder value.

Meanwhile, ONGC said the board approved a 135% interim dividend of Rs 6.75 for every Rs 5 stake. The company has identified November 22, 2022, as the record date for the dividend distribution.

ONGC was trading 2% higher at Rs 142.50 at 9:27 am, while the S&P BSE Sensex was down 0.21%. The stock has gained 12% over the past month, outperforming the broader market, compared with a 6.4% gain for the benchmark index. ONGC has been trading at its highest level since July 1, 2022.