ONGC's Q1 net may slip 16.5% on lower realisation: Poll

Oil and Natural Gas Corp’s June quarter profit may decline around 16.5 percent year-on-year to Rs 5076 crore on lower realizations. The state-run firm’s sales will decline around 1.5 percent Y-o-Y to Rs 19777 crore, states CNBC-TV18 poll. The firm will announce numbers later in the day.

Analysts on an average expect the firm's net realisation to slip to USD 42.8/bbl as against USD 46/bbl. During the quarter, both oil and gas production will fall  anything between 1-5 percent Y-o-Y, they estimate. Read This: Reliance, IOC, ONGC bid for Guj terminal stake

Meanwhile, Nirmal Bang expects around 19 percent Y-o-Y drop in company profit to Rs 4931.2 crore. Sales may marginally decline Y-o-Y to Rs 19761.8 crore.

Motilal Oswal has estimated the firm to report Rs 4699. 5 crore profit on Rs 19642 crore revenues.

Stock strategy

In past one year, ONGC shares have declined around a percent to Rs 278.70. Global broking firms, Credit Suisse (CS) and Barclays have however upgraded the stock on better prospects. CS says the government's gradual increase in fuel prices can be a catalyst for earnings, and hence has upgraded the stock to ‘outperform’ from ‘neutral’.

Barclays has upgraded ONGC to ‘overweight’ from ‘equal weight’, while raising its EPS ( earnings-per-share) forecast for FY15-FY16 by 8 to 14 percent and has also assumed that lower retail fuel under-recoveries could even lift earnings further.