Buy ONGC; target of Rs 302:KRChoksey

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

Choose Stock Exchange: BSE LIVE NSE LIVE

26 Aug, 2025 12:21

Volume

Todays L/H

More

×

KRChoksey's research report on ONGCONGC reported net profit of INR. 4,842 crs down 11.3% QoQ and 11.1% YoY. Net profits was down QoQ due to lower net realisation, higher raw material consumption and higher exploration cost write off, however statutory levies was lower other income was higher on a QoQ basis. ONGC’s net crude price realization decreased 17.12% QoQ and increased 17.95% YoY to $48.83/barrel; the QoQ decrease is mainly on account of lower subsidy sharing this quarter. Raw material consumption was INR. 326 crs up 123% QoQ and 146% YoY. Statutory levies were INR. 5,277 crs down 6.8% QoQ and 3.2% YoY. Exploration cost written off was INR. 1,733 crs up 12.1% QoQ and down 9.4% YoY due to higher dry well write offs QoQ. Other operating expense was lower by 11.6% QoQ and up 23.8% YoY to INR. 4,011 crs. EBITDA stood at INR. 8,775 crs down 17.1% QoQ and 2.8% YoY.We remain positive on the stock in the light of diesel de regulation, new short term subsidy sharing formula; soft crude oil prices will result in lower gross under recoveries on kerosene, increasing production from OVL and cheap valuations. We expect some clarity to emerge on long term subsidy sharing front which will be positive policy trigger for the stock. However, we believe that the net realizations for FY16 for the company will continue to be on the higher side with NIL subsidy or lower subsidy burden imposed on the upstream companies due to lower international crude prices. At CMP of INR 252, the stock is trading at 8.6X of its estimated EPS FY17E. We recommend a BUY on the stock with a Price Objective (PO) of INR 302.For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Read More