Buy Oil And Natural Gas Corporation, target price Rs 208: HDFC Securities

HDFC Securities has buy call on Oil And Natural Gas Corporation with a target price of Rs 208. The current market price of Oil And Natural Gas Corporation is Rs 165.4. Time period given by analyst is one year when Oil And Natural Gas Corporation Ltd. price can reach defined target.

Oil And Natural Gas Corporation Ltd., incorporated in the year 1993, is a Large Cap company (having a market cap of Rs 208706.83 Crore) operating in Gas & Petroleum sector.


Financials
For the quarter ended 31-12-2021, the company has reported a Consolidated Total Income of Rs 147814.67 Crore, up 19.74 % from last quarter Total Income of Rs 123444.95 Crore and up 44.33 % from last year same quarter Total Income of Rs 102416.51 Crore. Company has reported net profit after tax of Rs 10936.33 Crore in latest quarter.

Investment Rationale
The brokerage maintains BUY recommendation on ONGC with a target price of INR 208, based on (1) increase in crude price realisation and (2) improvement in domestic gas price realisation (to USD 2.9/mmbtu). Average 9MFY22 oil price realisation improved to USD 74/bbl vs USD 44/bbl in FY21, given the expected global economic rebound, post COVID. While Q3FY22 revenue was in line, EBITDA/APAT were 4/14% above estimates, owing to lower-than-expected employee cost, other expenses and exploration costs, and higher- than-expected other income.

Promoter/FII Holdings
Promoters held 60.41 per cent stake in the company as of 31-Dec-2021, while FIIs owned 8.87 per cent, DIIs 17.17 per cent.