Prabhudas Lilladher's research report on Oil and Natural Gas Corporation
ONGC’s result were below estimates with EBITDA/PAT of Rs 194.5 bn (+19% Q/Q, PLe: Rs 206.4 bn) and Rs 100.2 bn (vs Net loss of Rs 2.5 bn in Q4FY23, PLe: Rs 107.9 bn) respectively on a standalone basis. Oil production increased marginally 1% QoQ while gas production fell by 1% QoQ. Production volume is expected to increase with commencement of production from KG Basin and we have estimated a 5.4% CAGR and 9% CAGR in oil and gas production, respectively over FY23-FY25.
Outlook
The stock is currently trading at 44.3x FY25 EPS and 2.4x Fy25 EV/EBITDA. We maintain our ‘Buy’ rating with a TP of Rs 218, valuing the standalone business at 6x FY25 adj EPS of Rs 30.5 and add the value of investments of Rs 35.
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