CLSA upgrades ONGC shares to 'high conviction outperform', believes stock can rally 42%

Over the past 12 months, shares of ONGC have risen around 17 percent.

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

Choose Stock Exchange: BSE LIVE NSE LIVE

26 Aug, 2025 12:21

Volume

Todays L/H

More

×

Oil and Natural Gas Corporation shares surged after the oil marketing major bagged an upgrade from Hong Kong-based brokerage CLSA.

The brokerage upgraded ONGC shares to 'High Conviction Outperform' from 'Outperform' earlier, raising its price target to Rs 360 per share. This indicates an upside of around 42 percent. CLSA raised its EPS estimates by 2-8 percent over FY25-27.

At 9.19 am, ONGC shares were quoting Rs 262.54 on the NSE, emerging as the top winner on the Nifty 50 index, up 3.22 percent.

In 2025, ONGC shares have multiple volume and realisation triggers, including the increased production from the eastern offshore field. This will lift ONGC's domestic oil and gas output by 10 percent and 20 percent, respectively, before the end of the year.

Further, the removal of the windfall tax may also allow ONGC to earn a higher than $75/bbl

realisation if crude recovers.

CLSA noted that despite multiple triggers, ONGC shares are trading at a material discount to its own and its peers' average valuations. ONGC also offers an attractive six percent dividend yield.

Earlier this month, Jefferies, meanwhile, had issued a note that saw a 58 percent upside in ONGC, and has reiterated its buy call. The recent correction in the shares of ONGC seem to be overdone, said Jefferies. The anticipated ramp up of KG basin production in Q4FY25 and Q1FY26 is another trigger supporting the price action.

Over the past 12 months, shares of ONGC have risen around 17 percent, as compared to a 9.8 percent rise in the Nifty 50. However, from its 52-week high, ONGC shares have slipped 25 percent.