Detailed Narrative
Q2 FY26 Financial Performance Overview
Oil India reported standalone revenue of INR 5,456 crores for Q2 FY26, marking a 9% QoQ growth. However, the half-year revenue stood at INR 10,469 crores. The EBITDA margin saw a decline to 34% from 47% in the previous quarter, primarily attributed to lower crude oil price realization and significant well write-offs. Standalone PAT for Q2 FY26 was INR 1,044 crores, reflecting a 28.8% QoQ growth, but the half-year PAT of INR 1,857 crores was considerably lower than INR 3,300 crores in the previous year.
Operational Performance and Production Challenges
The combined oil and gas production for Q2 FY26 was 1.652 MMTOE. Crude oil production experienced a minor decrease of 0.6% QoQ and 2.58% YoY, settling at 0.848 million metric tons. Natural gas production also saw a 2.8% QoQ decrease to 0.804 bcm. Management attributed this dip to temporary production slowdowns caused by external factors, including ethnic group blockades in the Northeast, which temporarily reduced daily production to 8,100 metric tons before normalizing to 9,600 metric tons.
Numaligarh Refinery Limited (NRL) Performance and Expansion
NRL, a key subsidiary, demonstrated strong performance with Q2 FY26 revenue of INR 6,442 crores, up 2.5% QoQ and 24% YoY. The refinery achieved over 100% capacity utilization and an 86% distillate yield. Its Gross Refinery Margin (GRM) significantly improved to $10.56 per barrel in Q2 FY26, a 110% increase QoQ. The mechanical completion of the Numaligarh Siliguri pipeline was achieved on October 12, 2025, and the primary unit of the refinery expansion is slated for commissioning by December 2025, with full ramp-up expected by Q2 FY27.
Exploration and Development Activities & Write-offs
Oil India drilled 18 new wells in Q2 FY26, achieving 100% of its target, and a total of 32 wells in HY26, marking a 28% YoY increase. An offshore exploration campaign in the Andaman Basin identified 'traces of hydrocarbon,' though it is not yet a declared 'discovery' and requires further studies and a supplementary 3D seismic survey within 3-4 months. The company recorded write-offs of approximately INR 723 crores for an Andaman well and INR 700 crores for Bangladesh and Gabon blocks, primarily due to non-commerciality or decisions to exit these assets.
Capital Expenditure and Debt Profile
The company's total capex budget for the current year is approximately INR 7,000 crores, with INR 1,927 crores allocated to E&P activities (including INR 1,700 crores for development drilling and INR 650 crores for seismic). An additional INR 2,284 crores is budgeted for normal PPE. As of the first seven months, around INR 5,561 crores has been spent, including INR 550 crores for equity contribution to a material subsidiary, achieving 70-75% of the budget. NRL's total debt stood at INR 17,799 crores in Q2 FY26.
International Asset Management and Shareholder Returns
Oil India's 4% stake in Area 1 Mozambique saw the withdrawal of force majeure🌐 in November 2025, allowing development activities to resume. The company is actively pursuing deepwater exploration partnerships with entities like Total Energies and Woodside Energy. Significant funds from Russian investments (USD 474 million from TYNGD and USD 498 million from Vankorneft) are currently held up due to sanctions on Singapore-incorporated entities, though management is hopeful for positive news on repatriation by early next financial year. An interim dividend of INR 3.50 per share was declared for the quarter.