India Infoline has rated Oil and Natural Gas Corporation as a market performer with a target price of Rs 950 in its June 27, 2008 research report. "During Q4 FY08, ONGC reported sales growth of 26% to Rs 156 billion, higher than our expectations. Out performance was driven by slightly higher oil volumes. During Q4 FY08, ONGC sold 6.06 million tons of crude oil (down 0.8% yoy and up1.2% qoq) and 4.9bcm of gas (down 5.2% yoy and 7.9% qoq). Net crude oil realization for the quarter was at USD 49.7 per barrel as compared to USD 54.5 per barrel in Q3 FY08. The subsidy burden for the company in the form of discounts to oil marketing companies was Rs 84.7 billion, much in line with our estimates."

"We believe, ONGC through its IOR/EOR initiatives and increased production from marginal fields should be able to maintain its production levels in the next couple of years. However, with crude oil prices touching USD 140 per barrel and expected to further rise from here, the subsidy burden could increase substantially for ONGC. This would have a considerable impact on earnings of the company. We rate ONGC as a Market Performer, with a target price of Rs 950," says India Infoline's research report.

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