Source: CNBCTV18
Analysts on Thursday, May 22, projected up to a 50% upside on Oil and Natural Gas Corporation Ltd. (ONGC) shares after the company reported its fourth quarter earnings after market hours on Wednesday.
Brokerage firm CLSA has a "high conviction outperform" rating on the stock with a target price of â¹360 per share, indicating an upside of 44.6% from its previous closing price of â¹248.99 apiece.
CLSA said ONGC's standalone fourth quarter earnings before interest, taxes, depreciation and amortisation (EBITDA) was 3% below its estimates. The company's profit after tax (PAT) of â¹6,450 crore was a big 22% miss on its forecast, largely due to big drywell write-off recognised in the quarter under review.
Its standalone oil and gas production increased 5% and 4%, to 413 thousand barrels per day (kbpd) and 54.4 million metric standard cubic metre per day (mmscmd), respectively, on the back of rising output from KG-98/2 field.
ONGC's gas price realisation increased by 4% sequentially, helped by increasing the share of new well gas in its output, CLSA said.
Meanwhile, Jefferies has a "buy" rating on the stock with a target price of â¹375 per share.
Jefferies said the company's fourth quarter standalone EBITDA was 9% more than the previous year but was little changed sequentially, and was marginally below Jefferies' estimates with production and realisations in-line.
Its PAT was 31% below estimates on higher exploratory well write offs, It said.
The company's consolidated EBITDA was 14% more than estimates on the back of strong showing by HPCL, with PAT at â¹8,860 crore, which was 3% below estimates due to elevated write-offs.
The daily crude and gas production has risen for the second successive quarter, Jefferies said.
Q4 performance
ONGC reported a net profit of â¹6,448 crore in the March quarter, which was below Street estimates of â¹8,804 crore. The same was also down 22% from the previous quarter's â¹8,240 crore.
Its revenue of â¹34,982 crore was above a CNBC-TV18 poll of â¹34,046 crore and up 4% from â¹33,717 crore in the third quarter.
Its EBITDA of â¹19,008 crore beat estimates of â¹17,966 crore. However, it was little changed sequentially from â¹19,057 crore in the previous quarter.
The company's margin expanded to 54.3% from Street estimates of 52.8% but contracted from the December quarter's 56.5%.
ONGC's exploratory well costs were at â¹4,713 crore in the fourth quarter in comparison to â¹1,467 crore.
The company's board of directors also recommended a final dividend of â¹1.25 per equity share of face value â¹5 each, subject to the approval of shareholders.
Of the 30 analysts that have coverage on the stock, 20 have a "buy" rating, four have a "hold" rating and six have a "sell" rating.
ONGC shares ended 0.11% lower at â¹248.99 apiece. The stock has gained 5.08% this year, so far.
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