ONGC shares rise 2% regardless of 18% drop in Q2 revenue. Verify goal value by Nomura, Goldman Sachs
ONGC reported an 18% year-on-year (YoY) decline in quarterly revenue to Rs 9,848 crore as a result of decrease oil costs. Revenues from operations fell 2.5% to Rs 33,031 crore within the July-September quarter. The corporate declared an interim dividend of Rs 6 per fairness share for the present fiscal yr, with a complete payout of Rs 7,548 crore.
ONGC realised a crude oil value of $67.34 per barrel from its nominated fields throughout the quarter, down 14% from a yr earlier, whereas realisation from three way partnership fields fell 12.3%. Pure fuel value realisation from nominated fields was 3.8% increased at $6.75 per mmbtu. Nonetheless, common costs from new properly fuel, which is linked to crude oil charges, dropped 11.3% to $8.36 per mmbtu.
Goldman Sachs maintained its ‘Promote’ score on ONGC with a goal value of Rs 220, a 12% upside from present market ranges. ONGC has guided for a 5% CAGR in oil and fuel manufacturing over FY25-27, although Goldman Sachs fashions a extra conservative 2% development. The brokerage highlighted that the inventory has underperformed the Sensex, and it has reduce its FY26-28 EBITDA estimates by 13%, citing valuations that stay unattractive.
Nomura has maintained its Impartial score on ONGC however trimmed the goal value to Rs 270 from Rs 275, citing decrease quantity development and weaker crude realizations. The brokerage reduce its consolidated EPS estimates by 14% and seven% for FY26 and FY27, respectively, whereas noting that the inventory presently trades at cheap valuations of about 6.6 instances FY27 earnings and 0.8 instances ebook worth.
In its post-results interplay, ONGC’s administration outlined manufacturing and funding plans centered on regular development and value effectivity. The corporate is focusing on average will increase in oil and fuel output over the subsequent two years, backed by annual capital expenditure of round Rs 30,000-35,000 crore. It additionally plans to trim working bills by about Rs 5,000 crore by effectivity measures and increase its renewable vitality capability to 10 GW by 2030.ONGC is primarily an upstream firm, centered on the exploration and manufacturing of crude oil and pure fuel. The upstream sector of the oil and fuel trade entails actions like looking for and extracting uncooked supplies from the bottom, which is the core enterprise of ONGC. Shares of the corporate had been buying and selling at Rs 253, increased by 1.6% from the final shut on the NSE. ONGC is buying and selling 9% under its 52-week excessive of Rs 273.
(Disclaimer: The suggestions, recommendations, views, and opinions expressed by specialists are their very own and don’t characterize the views of The Financial Occasions)
