Emkay's research report on Oil and Natural Gas Corporation (ONGC)
Results came below our estimates with EBITDA at Rs71.2bn (our estimate of Rs99.1bn) and PAT at Rs35.7bn (our estimate of Rs58.9bn) on the back of higher subsidy sharing and DD&A charges
Crude oil production grew by 2.9% qoq to 6.25mmt, while Gas volume grew by 6.1% to 6.012BCM, mainly due to higher production from marginal fields. Net realization for the quarter stood at $35.6 against $41.4/$46/bbl on qoq/yoy basis
Of the total gross under recovery of Rs154bn, the total upstream share for Q3FY15 stood at Rs109bn (71% share). Within upstream, ONGC’s share stood at 86.8% to Rs 94.6bn.
"We maintain our positive bias on ONGC. Though we have cut our EPS estimates by 9.7/10% for FY15/16 on back of lower crude oil price assumption @70/75/bbl for FY16/17E respectively. Considering this our revised target price on FY17EPS comes at Rs 398, maintain Buy. Currently the stock trades at 9.8x FY17EPS and 1.5x P/BV", says Emkay Global Financial Services research report.
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