HDFC Securities is bullish on ONGC has recommended buy rating on the stock with a target price of Rs 275 in its research report dated 03 Aug 2018.
HDFC Securities' research report on ONGC
ONGC’s 1QFY19 revenue was at Rs 272.13bn (+ 42.7% YoY, +13.5% QoQ), led by higher oil realisations of Rs 4,976/bbl, before VAT/CST (+ %51.3 YoY, +16% QoQ), increase in gas sales volumes at 4.9bcm (+ 2.9% YoY), and higher gas realisations at USD 3.1/mmbtu (+19%). Lower oil sales volumes (-3.5% YoY) partially offset the growth.
Outlook
We estimate strong 20.2% EPS CAGR over FY18-20E and dividend yield of more than 5.7/6.1% for FY19/20E. Despite strong near-term growth prospects valuations are undemanding at 7x FY20E PER. Our TP is Rs 275/sh (10x Jun-20E standalone + OVL EPS and Rs 37 from investments). Maintain BUY.
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