Moneycontrol
Last Updated : Jul 01, 2020 09:29 AM IST | Source: Moneycontrol.com

ONGC share price dips 4% on poor Q4 show; CLSA reiterates sell

CLSA has reiterated sell call on the stock with a target at Rs 55 per share.

 
 
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Oil and Natural Gas Corporation (ONGC) share price declined 4 percent in the early trade on July 1 after the company posted a poor set of numbers in the quarter ended March 2020.

The state-owned company on June 30 posted a net loss of Rs 3,098 crore for the quarter ended March 31, impacted by an impairment on the slump in oil and gas prices. The company had reported a profit of Rs 4,239.50 crore in Q4 FY19 and Rs 4,226.45 crore in Q3 FY20.

Revenue from operations during the quarter declined 19.8 percent year-on-year to Rs 21,456.2 crore, while the quarter-on-quarter fall was 9.5 percent.

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Earnings before interest, tax, depreciation and amortisation (EBITDA) fell 71.7 percent sequentially to Rs 2,512 crore and margin fell 2,570 bps QoQ to 11.7 percent in Q4FY20.

Also Read - ONGC reports first-ever quarterly loss of Rs 3,098 crore on impairment loss, revenue dips 20%

CLSA has reiterated sell call on the stock with a target at Rs 55 per share.

According to CLSA, it is a big Q4 miss with EBIT was 34 percent below the estimate. However, the impairment & large forex losses was partially offset by a tax write-back.

The company is among the more expensive global E&Ps. The fall in domestic gas price & more equity supply by the government are overhangs.

The pressure on profit has taken away dividend yield support, reported CNBC-TV18.

According to Motilal Oswal, although gas production has been delayed, broking house expects it to jump significantly over the next 2-3 years. This would be led by the 13 projects that the company is working on. Oil production is expected to remain flat.

The stock is trading at 3.3x FY22E EV/EBITDA and 4.3x FY22E P/E. Motilal Oswal value the company at 10x FY22E adjusted EPS of Rs 7.8 and add value of investments to arrive at a target price of Rs 105 and reiterated buy.

At 09:19, hrs Oil and Natural Gas Corporation was quoting at Rs 79.65, down Rs 1.75, or 2.15 percent on the BSE.
First Published on Jul 1, 2020 09:29 am
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