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ONGC and Power Grid are valued in different ways.
ONGC is valued on discounted cash flow and Power Grid on excess return, because the two businesses do not work the same way. Below, each is set out on its own record and its own value drivers; the two fair values sit in the full valuations.
- Valuation method: ONGC on discounted cash flow; Power Grid on excess return.
- Size: the two are worth roughly the same on the stock market.
- Record: ONGC has grown revenue faster: ONGC compounded at about 8% a year (FY2018–FY2026) and Power Grid at about 6% (FY2018–FY2026).
- What to watch: crude oil prices at ONGC; capex on new lines at Power Grid.
| ONGC | Power Grid | |
|---|---|---|
| Price | ₹225 | ₹257 |
| Market cap | ₹2.83L Cr | ₹2.39L Cr |
| P/E | 5.7 | 14.8 |
| P/B | 0.76 | 2.38 |
| Fair value 🔒 sign in | ₹0,000 | ₹0,000 |
| Upside 🔒 sign in | +00% | +00% |
| Valued on | Discounted cash flow | Excess return |
01Two businesses
India's oil and gas producer — and a refiner too
Oil and Natural Gas Corporation is India's largest producer of crude oil and natural gas, majority-owned by the Government of India. Its overseas arm, ONGC Videsh, holds oil and gas assets in other countries.
The national grid, as a business
Power Grid Corporation of India, majority-owned by the Government of India, owns and operates most of the country's inter-state electricity transmission network — the high-voltage lines and substations that move power from where it is made to where it is used.
02The records side by side
ONGC has grown revenue faster: ONGC compounded at about 8% a year (FY2018–FY2026) and Power Grid at about 6% (FY2018–FY2026). By revenue, ONGC is about 14.2 times the size of Power Grid. ONGC kept 7.5% of revenue as net profit in FY2026; Power Grid kept 34.1% of revenue as net profit in FY2026 — a sign of very different business models.
Full ten-year tables and charts are on each company's page: ONGC · Power Grid.
03What each price assumes
Work backwards from each share price and you can see what buyers are taking for granted — the rate each company must sustain to justify what it costs, against what its own record supports.
04What decides each one's value
- Crude oil pricesHigher prices lift ONGC's realisations, though government levies have capped the gains in the past.
- Production volumesMany fields are mature; new deep-water projects need to offset natural decline.
- Capex on new linesBringing renewable power from deserts and coasts to cities needs a huge transmission build-out, which grows Power Grid's earning base.
- Allowed returnsThe regulated return on equity is the core of its profit.
05What could go wrong
- Government interventionWindfall taxes and pricing controls have taken away upside before.
- Field declineWithout new discoveries, output falls year after year.
- Regulatory resetsA lower allowed return in a future tariff period would reduce value.
- ExecutionLand acquisition and right-of-way problems can delay projects.
06Which is better value?
Sign in free to see which trades further below its worth
- ✓Both fair values per share — each on the method that fits the business
- ✓Every step of both workings — growth, margins and cost of capital, with sources
- ✓Bull, base and bear cases — for each company
- ✓Downloadable reports — the full write-up for each, yours to keep
08Questions people ask
Is ONGC or Power Grid better value?
That turns on how far each share trades from its estimated fair value. Both figures, with every step of the working, are in the full valuations, free to view once you sign in. On the public numbers, ONGC trades at 5.7 times earnings and 0.76 times book value, and Power Grid at 14.8 times earnings and 2.38 times book value — but multiples alone mislead when two businesses work differently, which is why each is valued on the method that fits it.
What is the difference between ONGC and Power Grid?
Oil and Natural Gas Corporation is India's largest producer of crude oil and natural gas, majority-owned by the Government of India. Power Grid Corporation of India, majority-owned by the Government of India, owns and operates most of the country's inter-state electricity transmission network — the high-voltage lines and substations that move power from where it is made to where it is used.
Are ONGC and Power Grid valued the same way?
No. ONGC is valued on discounted cash flow and Power Grid on excess return, because forcing one model onto both would misstate at least one of them.
What does today's price assume for ONGC and Power Grid?
Worked backwards from the share price, ONGC needs about 0% growth and Power Grid about 14.6% return on equity, against 0% and 17.0% in their own records.