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Buy ONGC, target of Rs 1500: Karvy
Karvy Stock Broking has maintained its buy rating on Oil and Natural Gas Corporation with a target price of Rs 1500. ONGC's Q1FY09 results reflect the buoyant crude oil price trend, but only partially as it has also borne huge subsidy burden.
Karvy Stock Broking has maintained its buy rating on Oil and Natural Gas Corporation with a target price of Rs 1500 in its July 30, 2008 research report. "ONGC's Q1FY09 results reflect the buoyant crude oil price trend, but only partially as it has also borne huge subsidy burden. Still, the results are impressive with 43.0% YoY growth in adjusted net profit to Rs 65,929 million."
"The subsidy burden for ONGC in FY2009 has been decided at Rs 360 billion, which is 70% higher than that in FY2008. We are not revising our estimates for FY2009E and FY2010E as of now as we believe that the subsidy burden figure will continue to be erratic despite the recent cap announced by the government. But we expect higher subsidy burden to be largely offset by the recent depreciation in rupee as well as higher crude oil price. We maintain our Buy rating on the stock with target price of Rs 1500," says Karvy's research report.
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