Other factors behind the earnings revisions are expected drops in contributions from its overseas subsidiary ONGC Videsh and refining unit Mangalore Refinery and Petrochemicals Ltd. BO> , the bank said, adding that it maintained its ''neutral'' rating on ONGC shares.
State-run ONGC, India's most valuable company, last month reported a 9 percent rise in profit for the year ended March 2006, boosted by high global crude rates and despite price controls.
The Merrill Lynch report said the provisional unaudited results of ONGC were disappointing, with its earnings per share of 99.4 rupees coming 10 percent below its expectation.
ONGC has said it paid subsidies worth nearly $20 per barrel in the last fiscal year. Its subsidy bill nearly trebled to 120 billion rupees in the year to March 2006, compared with 41 billion rupees in the previous year.
($1 = 44.8 rupees) REUTERS CS ND0924