A Multi-Dimensional Financial Performance Review of ONGC and Reliance: Integrating Ratio Analysis, ANOVA, and Advanced Financial Models

ABSTRACT:

This research presents a comparative analysis of the financial performance of two Leading India’s energy giants Oil and Natural Gas Corporation (ONGC) and Reliance Industries Limited (RIL) over the last five financial years (FY 2020–21 to FY 2024–25). ONGC, a public sector undertaking, primarily operates in upstream oil and gas exploration, while RIL, a private conglomerate, has diversified interests in petrochemicals, refining, telecommunications, and retail.

The research employs a comprehensive analytical framework to assess performance across key dimensions: liquidity, profitability and solvency through traditional ratio analysis. To deepen the investigation, the study integrates advanced financial models. The DuPont Analysis is used to deconstruct the Return on Equity (ROE) into its operational, asset management, and financial leverage components, revealing the fundamental drivers of shareholder returns. Furthermore, the J-UK Model Analysis is applied to evaluate the overall financial health and strategic positioning of the firms by examining the interplay between liquidity, profitability, and productivity. A One-Way Analysis of Variance (ANOVA) at a 5% significance level is utilized to statistically determine if the observed differences in the mean financial ratios of the two companies are significant.

Over the period, RIL consistently posted higher total revenues driven by strong performance in its consumer-facing businesses and robust refining margins. In contrast, ONGC’s profitability showed fluctuations due to volatility in global crude oil prices and regulatory constraints, although it benefited from rising prices in FY 2022-23.

RIL exhibited steady growth with significant capital expenditure in its new energy and digital services segments, while ONGC maintained a relatively conservative investment approach. The study also reveals that RIL demonstrated stronger operational efficiency and returns on shareholder funds, whereas ONGC’s performance remained closely linked to global commodity cycles.

In conclusion, while both companies performed robustly in their respective domains, RIL showed superior financial stability and growth momentum, largely due to its diversified portfolio and strategic investments in emerging sectors. This comparison underlines the contrast between a diversified private conglomerate and a state-owned energy producer operating in a volatile commodity-driven environment.

Keywords: Current ratio, Quick ratio, Net profit ratio, Debt-equity ratio, EBITDA, Anova and Private and Public Enterprises.