Moneycontrol PRO
Upcoming Event:Attend Algo Convention Live, 2 Days & 12+ Speakers at best offer Rs.999/- for Moneycontrol Pro subscribers. Price Increasing Soon!

ONGC share price gains as company turns profitable in Q4; Motilal Oswal sees 22% upside

ONGC is further improving process efficiencies to keep its profit positive. The stock is trading at 2.5x FY23E EV/EBITDA and 4.4x FY23E P/E. We value the company at 10x FY23E adjusted EPS of Rs 11.7, Motilal Oswal said.

June 28, 2021 / 12:08 PM IST
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

Oil and Natural Gas Corporation (ONGC) share price was up 2 percent in the morning session on June 28.

The stock was trading at Rs 123.25, up Rs 2.35, or 1.94 percent at 10:43 hours. It has touched an intraday high of Rs 124.50 and an intraday low of Rs 122.30.

The company, on June 24, reported a standalone profit of Rs 6,734 crore for the quarter ended June 2021, driven by realisations. The PSU oil & gas major posted a loss of Rs 3,214 crore in the year-ago quarter.

Gross revenue during the quarter declined 1.2 percent to Rs 21,189 crore compared to the corresponding period last fiscal, the company said in its BSE filing.

Catch all the market action on our live blog

Close

The company board recommended final dividend of Rs 1.85 per equity share of Rs 5 each i.e. 37 percent for the financial year 2020-21, subject to declaration by the members at the ensuing Annual General Meeting.

In the full year, FY21, ONGC registered a 16.5 percent decline in profit at Rs 11,246 crore and 29.2 percent fall in gross revenue at Rs 68,141 crore, compared to the previous year.

ONGC said it had declared a total 10 discoveries (3 in onland, 7 in offshore) during FY21 in its operated acreages. "Out of these, 6 are prospects (1 in onland, 5 in offshore) and 4 are pools (2 in onland, 2 in offshore)."

Global research firm has has upgraded the stock to buy and has raised target to Rs 165 from Rs 105 per share. It is of the view that the stock is pricing in brent of only USD 51 per bbl adding that using spot rate would take up fair value to Rs 260 per share, according to a CNBC-TV18 report.

The company may see 145 percent rise in formula-based domestic gas price over next none months and increase FY22-23 EPS by 32 percent, CLSA added.

Domestic research and broking firm Motilal Oswal in its report has maintained buy call on the stock with target of Rs 150 per share. For ONGC, cash flow breakeven stands at USD 50-55 per bbl for oil and USD3-3.5 per mmbtu for gas. As the variable cost of production is low, domestic gas (APM) price ceiling won’t affect production from KG basin, it said.

"ONGC is further improving process efficiencies to keep its profit positive. The stock is trading at 2.5x FY23E EV/EBITDA and 4.4x FY23E P/E. We value the company at 10x FY23E adjusted EPS of Rs 11.7 and add value of investments to arrive at our target of Rs 150. We reiterate our buy rating," Motilal Oswal added.

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.



Download your money calendar for 2022-23 here and keep your dates with your moneybox, investments, taxes

Moneycontrol News
first published: Jun 28, 2021 12:08 pm
Sections
ISO 27001 - BSI Assurance Mark