Global brokerage firms remained positive on state-owned oil & gas exploration company ONGC despite a weak Q4 show, with CLSA expecting a big re-rating on the stock.
Reiterating buy call on the stock and raising price target to Rs 285 from Rs 240, CLSA raised its EPS estimates by 14-18 percent for FY20-21, though a slew of one-offs caused a big miss in Q4.
"Q4 standalone PAT was well below estimates on one-off charges & impairments. EBITDA missed by a smaller 5 percent," the brokerage said, adding Q4 results confirmed a subsidy exemption for FY19.
CLSA believes that subsidy burden fears should be allayed.
Macquarie also has an outperform call on ONGC with a price target at Rs 210, though Q4 EBITDA-EPS was significantly below consensus and estimates.
The state-run oil company reported a massive 51 percent year-on-year degrowth in profit at Rs 4,044 crore for the quarter ended March 2019.
Revenue during the quarter fell 3.3 percent year-on-year to Rs 26,758 crore and operating income slipped 26.6 percent with margin contraction of 1,360 bps YoY.
The miss in earnings was led by both onshore and offshore segment. A CNBC-TV18 poll estimates for profit were Rs 6,255 crore on revenue of Rs 24,974 crore and EBITDA at Rs 12,874 crore with margin at 51.5 percent for the quarter.
The stock was quoting at Rs 168.85, down Rs 0.80, or 0.47 percent on the BSE at the time of publishing this copy.
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