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Buy Oil and Natural Gas Corporation target of Rs 155: Prabhudas Lilladher

Prabhudas Lilladher is bullish on Oil and Natural Gas Corporation has recommended buy rating on the stock with a target price of Rs 155 in its research report dated June 25, 2021.

June 28, 2021 / 12:05 PM IST
 
 
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Prabhudas Lilladher's research report on Oil and Natural Gas Corporation


We increase our earnings estimates by 35%/33% to factor rise in crude oil prices of USD65/70/bbl for FY22/23E. Global crude oil prices recently increased sharply as OPEC countries cut production, while demand recovers from recent pandemic. However as OPEC + countries increase their supplies and Iran sanctions get lifted, prices will likely come off. ONGC stock underperformed broader index due to divestment concerns of Government of India share and inefficient capital allocation policies.



Outlook


However, we are positive about long term prospects given 1) production improvement in new projects, 2) higher crude oil realization with low cost and 3) attractive valuations. Reiterate ‘BUY’ with a TP of Rs155 (Rs114 based on 4.5x FY22E EV/E).

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first published: Jun 28, 2021 12:05 pm
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