Oil and Pure Fuel Company Ltd (ONGC) noticed its shares rallying 8 per cent in Wednesday’s commerce following the PSU oil agency June quarter outcomes. Analysts monitoring the oil & fuel sector stated ONGC’s Ebitda was greater than expectations on higher value-added product gross sales. A ramp-up of the KG basin asset stays the important thing efficiency driver for ONGC over FY25-26, they stated, including “it stays the important thing to manufacturing progress and earnings power.”
The inventory climbed 7.60 per cent to Rs 329.50 on BSE. The scrip has climbed 90 per cent up to now one yr.
JM Monetary earlier at present prompt ‘Purchase’ on ONGC with a goal value of Rs 325, because it noticed risk-reward cheap. The brokerage stated oil cartel OPEC+ could help crude round $75-80 a barrel, including that the federal government could permit ONGC to make web crude realisation of $75 a barrel.
“Additional, ONGC is more likely to see 10-15 per cent output progress with ramp-up of output from KG DW 98/2 block. ONGC can be a sturdy dividend play (4-6 per cent). At CMP, it trades at 6.2 instances FY26E consolidated EPS and 1 time FY26E BV.
Anand Rathi, which prefers upstream corporations because of better readability on oil & fuel realisations and quantity progress, sees crude oil costs at $80-90 barrel, because it expects greater provides from non-OPEC and weak demand to be counter-balanced by OPEC members’ manufacturing cuts.
“We improve our ONGC estimates to consider modifications in HPC’s earnings and reiterate our Purchase ranking, with a better goal of Rs 405 apiece, 4.5 instances FY26e EV/Ebitda (earlier 4 instances FY25e) and add the worth of investments at a 20 per cent low cost to market costs,” the home brokerage stated.
YES Securities stated ONGC’s Q1 crude and fuel manufacturing was in line however web crude realisation fell wanting expectations. “OVL’s topline efficiency improved in crude and fuel however the volumes stood flat for crude and lagged in fuel manufacturing. OVL’s profitability improved YoY on higher realisations & QoQ with no distinctive like in Q4FY24. We preserve a BUY ranking on ONGC, with a revised goal value of Rs 391 per share (Rs 385 earlier),” stated YES Securities.
ICICI Securities stated ONGC’s fuel value realisation at Rs 21.1 per scm was flattish sequentially, pushed by APM fuel value capped at $6.5 per mmBtu for FY24 and FY25.
“Nonetheless, given KG basin’s fuel eligibility for premium pricing and the current proposal for brand new nicely manufacturing to get a 20 per cent premium to APM costs, we see web fuel realisation averaging Rs 22.6 per scm over FY25–27E, above Rs 19.7 per scm seen in FY24. We observe these costs examine fairly favourably with FY18–23’s common blended value of Rs 10.9/scm,” it stated.
MOFSL has reduce its home manufacturing assumptions for FY25 and FY26. Contemplating the weak 1Q efficiency by MRPL and HPCL, it lowered its FY25 and FY26 consolidated PAT estimates for ONGC by 4-5 per cent. This accounts for possible LPG beneath recoveries.
“We worth the standalone enterprise at 8 instances FY26E adj. EPS of Rs 32 and add the worth of investments to reach at a TP of Rs 360,” MOFSL.
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