ONGC Q4 review: CLSA, Nomura & Jefferies see 14-38% upside

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26 Aug, 2025 12:21

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Global brokerages firm such as CLSA, Jefferies and Nomura have maintained their rating on Oil and Natural Gas Corporation (ONGC) after it declared its Q4 FY18 earnings after market close on Wednesday.

The oil major reported a 37 percent year-on-year (YoY) jump in net profit at Rs 5,915.12 crore on the back of higher oil prices. The company realised $66.71 per barrel of crude oil it produced from nominated fields, up from $54.91 a barrel it earned in January-March 2017.

Gas price realisation was up 15.6 percent at $2.89 per million British thermal unit.

Reacting to the Q4 result, CLSA raised its 12-month target price to Rs 240 from Rs 225 earlier, which translates in an upside of nearly 38 percent from Wednesday’s close of Rs 173.95.

Jefferies and Nomura maintain their minimum target price of Rs 200, which translates in an upside of over 14 percent from current levels.

We have collated recommendations from various global brokerage firms after declaration of its Q4 results:

CLSA: Buy| Raise target price to Rs 240 from Rs 225

CLSA maintains a buy rating on ONGC but raised its 12-month target price to Rs 240 from Rs 225 earlier post Q4 results. EBITDA (earnings before interest, tax, depreciation and amortisation) and net profit was a miss due to higher operating expenses and larger exploration write-offs.

Higher crude price led to a 6 percent hike in EPS. CLSA assumes upstream companies to bear all subsidies above Rs 40,000 crore. Recent reports of a formula with no subsidy till $70 per barrel is positive for the company.

ONGC is attractively priced at current levels as the risk-reward ratio is favourable. The stock is pricing Brent of US$53/bbl.

Jefferies: Buy| Target: Rs 225

Jefferies maintains a buy rating on ONGC post Q4 results with a target of Rs 225. The global investment bank lifted FY18 std. EPS by 11 percent on a YoY basis, but consolidated EPS, which included HPCL, lagged. Valuations remain inexpensive at 10.2x FY18 P/E when Brent averaged $58.

Nomura: Buy| Target: Rs 200

Nomura maintains a buy rating on ONGC post Q4 results with a 12-month target of Rs 200. It was a weak quarter for ONGC. The global investment bank prefers OMCs compared to upstream companies. The near-term market focus/concerns will be on government measures.

Disclaimer: The views and investment tips expressed by investment experts 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.