ONGC was gladdened by the rise in crude oil prices by 77 cents to $27.68 barrels on the Nymex crude futures even as the rest of the market found that depressing.

The stock of the state-run oil and gas exploration major edged up 1.08% to Rs 359 on BSE by 10:25 IST, as a result. A volume of 2,793 ONGC shares changed hands on BSE by then. On 24 March 2003 (in two sessions), the stock rose 1.65% from Rs 353.15 on 20 March 2003. Prior to that (between 3 and 20 March 2003), the scrip lost 9.55% to Rs 353.15 from Rs 390.45.

ONGC has been vindicated by the rise in oil prices today. And these are expected to rise further if the US-Iraq war drags on. There's already much concern that war may be prolonged what with the US army facing stiff resistance from Iraqi soldiers.

An oil price rise has a direct beneficial impact on ONGC's financials as it is a producer of crude oil. ONGC may also have been propped up by the fact that it has recently acquired overseas interests in oil assets in Sudan and Russia. Any firming up of global crude oil prices will make these investments even more profitable for the company.

ONGC had declined over the past week following a fall in crude oil prices on hopes that the US-Iraq war would end soon. On Friday, oil prices fell to a four-month low, as US and British forces secured key Iraqi oilfields and ports, calming market fears of widespread destruction by Iraqi troops.

ONGC is also expected to benefit from recent agreements signed with state-run oil refiners like BPCL, HPCL and IOC. It will now receive an added $5 per barrel for its crude oil than the usual price of $21 a barrel.

The financial performance of ONGC has also been impressive of late. For the third quarter ended 31 December 2002, ONGC recorded an 84% rise in net profit to Rs 2,593.47 crore (Rs 25.93 billion) on a 35% increase in net sales to Rs 7,604.99 crore (Rs 76.04 billion).

As on 31 December 2002, the Centre held 96.13% stake in ONGC, while the public and institutions held 1.22% and 2.27%, respectively.