State-run producer Oil & Natural Gas Corp reported a 32 percent fall in quarterly profit, just missing expectations, as lower average crude oil prices and a higher subsidy burden weighed on profits.
The company reported a net profit of 58.97 billion rupees for its fiscal second quarter ended September, down from 86.42 billion rupees a year earlier.
Analysts, on an average, had expected a net profit of 60.9 billion rupees, according to a Reuters poll of brokerages.
Net sales fell 13 percent to 197.88 billion rupees.
Shares of ONGC, India's third-biggest company with a market value of $41.9 billion, closed 0.6 percent lower on Thursday, ahead of the results. The stock has risen 3.5 percent so far in 2012, nearly matching a 4.3 percent rise in the BSE oil and gas index.