The stock of Oil and Natural Gas Corporation (ONGC) on Monday, May 29, hit an intra-day low of Rs 156.50 on the NSE as the shares of the state-run company plunged more than 4 percent on below par Q4 earnings. The stock settled at Rs 159.05 apiece on the NSE, down 2.87 percent in today's (May 29) trade. The shares have given nearly 6 percent returns on a year-to-date basis, outperforming the Nifty50, which has given 2.20 percent in the same time.

Share Market Live

NSE

Out of the 29 analysts tracking the firm, 21 has a 'buy' rating, five recommend a 'hold,' and three suggest to 'sell' the stock, according to data from Bloomberg. The consensus estimates of analyst represents an upside potential of 17.1 percent over the next 12 months.

ALSO READ: Adani Transmission shares dip 3% ahead of Q4 results today. What should investors do?

Momentum indicators Relative Strength Index (RSI) and Money Flow Index (MFI) are in a medium range at 51.5 and 53.8, respectively, according to data from Trendlyne. A number below 30 suggests that the stock is trading in an oversold zone while above 70 it is in the overbought zone.

"Given the predominance of 'sell' recommendations and the overall negative sentiment, it would be advisable to consider selling or avoiding ONGC shares at this time," said Nanavath Bhupal Naik, MD at Shares Bazaar.

Maintaining a 'buy' recommendation on the counter, analysts at domestic brokerage house ICICI Securities said, "Stronger long-term price assumptions and stronger cashflows drive a material 17 percent uptick in the target price to Rs 218 per share, a 33 percent upside from the current levels."

Key risks, as per the brokerage, include, a sharp reversal in oil and gas price trends, further delays in start of production from KG basin, and regulatory setbacks.

JM Financial has a 'buy' call on the stock with a target price of Rs 200. "ONGC's 4QFY23 standalone EBITDA was significantly lower at Rs 163 billion (Rs 16,300 crore) primarily due to a sharp jump in dry well write-off at Rs 44.7 billion (Rs 4,470) — dry well write-off tends to be volatile on a quarterly basis and, hence, gauging the sustainable trend is difficult, and net crude realisation at USD 71.8/bbl was also USD 3/bbl lower than JMFe," the brokerage stated.

Meanwhile, YES Securities has an 'add' rating on ONGC with a target price of Rs 185. "ONGC’s 4QFY23 standalone operating profit at Rs 118 billion (Rs 11,800 crore) (-26 percent on-year; -37 percent QoQ), stood below our and street estimates on higher than estimated operating expenses. The crude oil and NG production stood weaker on natural decline in ageing fields and due to fewer days in the quarter," the note stated.

"Going ahead, FY24 production is expected to rise driven by ramp-up of production in KG-98/2. The peak production of 45,000bpd of crude oil and 11mmscmd of NG from KG-98/2, though, is expected by FY25," YES Securities said.

ONGC's consolidated net profit slipped 53 percent to Rs 5,701 crore for the March quarter. The profit stood at Rs 12,061 crore in the same quarter of last year. The board has recommended a final dividend of Rs 0.5 per equity share for the financial year 2022-23.

ALSO READ: ONGC Q4 net profit slumps 53%, declares dividend

Revenue from operations during the quarter under review increased 5 percent to Rs 1.64 lakh crore. It was Rs 1.55 lakh crore in the corresponding quarter of last year.

On a standalone basis, ONGC reported a net loss of Rs 248 crore during the March quarter, compared with a profit of Rs 8,860 crore in the same quarter last year. Standalone gross revenues rose 5 percent to Rs 36,293 crore in the said period.

First Published:May 29, 2023 4:19 PM IST