S&P Global Ratings expects Oil and Natural Gas Corp.'s (NSE:ONGC, BOM:500312) solid downstream operations to cushion the impact of falling oil prices, according to a Monday release.

The rating agency projects the India-based integrated oil and gas company to have a stable adjusted EBITDA between 1 trillion rupees and 1.05 trillion rupees in fiscal 2026, supported by improved refining and marketing margins at its subsidiary, Hindustan Petroleum (NSE:HINDPETRO, BOM:500104).

This comes as the Brent oil prices are expected to hit $65 per barrel in 2025 and $70 per barrel in 2026.

Better marketing margins should also offset further losses on liquefied petroleum gas sales, although the latter should narrow in fiscal 2026 amid improved gas prices, S&P said.

S&P forecasts between 100 billion rupees and 120 billion rupees in discretionary cash flows for fiscal 2026, with funds for capital spending and shareholder returns expected to moderate.

Meanwhile, the company's funds from operations-to-debt ratio should improve to more than 40% over the next 12 to 24 months, according to S&P.

However, the rating agency sees the leverage ratio dipping below 40% in fiscal 2025 due to acquisitions and higher operating costs.