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ONGC edges higher after reporting record profit; Citi retains sell call

Japanese research firm Nomura has a neutral call on the stock with target of Rs 185: "Production continues on declining trend. Exploration capex to increase 1.5x."

May 30, 2022 / 09:51 AM IST
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Oil and Natural Gas Corporation (ONGC) share was trading in the green in the morning session after the company declared earnings on Saturday.

The firm reported a record net profit of Rs 40,305 crore in the fiscal year ended March, becoming India's second most profitable company after Reliance Industries. It said net profit for the fiscal soared 258 per cent to Rs 40,305.74 crore.

Consolidated net profit soared to Rs 49,294.06 crore in 2021-22 as compared to Rs 21,360.25 crore in 2020-21. Both standalone and consolidated net profit are the second-highest in the country.

The profit surge came despite a 3.7 percent drop in crude oil production to 21.7 million tonnes in 2021-22 as some of the firm's western offshore fields were hit by a severe cyclone in May last year. Gas output fell five percent to 21.68 billion cubic metres.

Standalone revenue from operations soared nearly 62 percent to Rs 1.10 lakh crore and consolidated turnover came in at Rs 5.31 lakh crore.

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The company's overseas arm ONGC Videsh reported a 16 percent drop in net profit to Rs 1,589 crore for 2021-22 as crude oil and natural gas output fell. Its crude oil production declined to 8.099 million tonnes in 2021-22 from 8.51 million tonnes in the previous year. Gas output fell to 4.231 billion cubic metres from 4.529 bcm last year.

ONGC declared a final dividend of 65 percent (Rs 3.25 per share of face value Rs 5 each) taking the total dividend paid in the fiscal under review to 210 percent (Rs 10.50 a share).

At 09:30 AM, the stock was quoting at Rs 146.45, up Rs 2.70 or 1.88 percent. It has touched an intraday high of Rs 147.35 and an intraday low of Rs 144.85.

Global research and broking firm Citi has maintained a sell call on the stock with a target of Rs 155: "The quarter operationally was in line; headlines below estimates. Production trends remain disappointing while upside could get capped given our bearish outlook on crude prices. Potential windfall tax remains an overhang."

Japanese research firm Nomura has a neutral call on the stock with target of Rs 185: "Production continues on declining trend. Exploration capex to increase 1.5x."

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Sandip Das
first published: May 30, 2022 09:51 am
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