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Last Updated : Feb 18, 2020 01:03 PM IST | Source: Moneycontrol.com

Hold Oil and Natural Gas Corporation; target of Rs 110: ICICI Direct

ICICI Direct recommended hold rating on Oil and Natural Gas Corporation with a target price of Rs 110 in its research report dated February 17, 2020.

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ICICI Direct's research report on Oil and Natural Gas Corporation


ONGC declared its O3FY20 results that were below our estimates on the profitability front, mainly due to higher depreciation & amortisation costs and lower other income. Revenues declined 3.2% QoQ at Rs 23710.1 crore (our estimate: Rs 22823.2 crore) on account of marginally lower realisations as well as sales volume QoQ. The oil & gas production was largely in line with our estimates. As per expectations, the quarter witnessed nil subsidy burden while net realisations were at US$59.7/bbl. EBITDA during the quarter declined 7.5% QoQ and came in at Rs 12298.3 crore (our estimate: Rs 11708.7 crore). Subsequently, reported PAT declined 33.7% QoQ to Rs 4151.6 crore (our estimate: Rs 5932.3 crore).


Outlook


We have a HOLD rating on the stock with a target price of Rs 110/share. We value core business i.e. standalone & OVL at Rs 90/share (6x FY22E core earnings) & investments at Rs 20/share (50% discount to current MCap).


For all recommendations report, click here


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First Published on Feb 18, 2020 01:03 pm
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