JPMorgan has an overweight rating on ONGC with a target price of Rs 212 per share.

The firm says that Brent is over $80 per barrel in CY22 and it is expected to be above $90 per barrel, given that the stock is still pricing around $60 per barrel, it can see further upside from here on.

They expect Bent to remain above $80 per barrel for the next two years and they see large earnings upside risk given that consensus earnings reflect a lower valuation as of now.

They do not see any regulatory risks on oil pricing and they also expect current domestic gas pricing formula to stay which will of course be positive for companies like ONGC. This will also allow for sharply higher domestic gas prices for ONGC leading to an earnings upgrade.

The stock right now trades at just 3 times price to earnings on spot crude prices. So there is of course a lot of room for an upside. ONGC is still a relatively under owned stock if we look at the investor community, so there could be more buying at current levels.

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(Edited by : Dipikka Ghosh)