ONGC share price jumped 5 percent on Tuesday after CLSA upgraded the stock to an 'outperform' rating and raised its target price to Rs 105 apiece from Rs 90, indicating an 8 percent upside. The global brokerage had earlier given a 'sell' call on the downstream company's stock.

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ONGC stock rose as much as 5 percent to its day's high of Rs 103.25 per share on BSE.

CLSA said that the EBITDA for the firm was 13 percent ahead of estimates on higher interest costs and a prior period tax provision.

It also increased FY21 EPS due to stronger crude prices in Q4 and FY22-23 EPS by 10-18 percent as it expects the formula-based domestic gas price to settle higher after the recent rally in gas prices at global hubs.

ONGC has rallied 34 percent the past three months fuelled by a 35 percent rally in the Brent price and on potential gas pricing reform.

Despite this, ONGC is pricing at a Brent crude price of $56/bbl versus a spot price of $62/bbl, suggesting scope for more gains even as futures indicate a decline in the Brent price to $55/bbl by December 2022, noted the brokerage.

Production ramp-up at KG-98/2 could also be a trigger for the stock over the next 12-18 months other than any positive changes in the gas pricing formula, it added.

Standalone net profit in the October-December quarter for the firm stood at Rs 1,378 crore was 67.4 percent lower than Rs 4,226 crore net profit in the same quarter of the previous year, the company said in a statement here.

The company realised $43.9 on every barrel of crude oil it produced and sold in the third quarter of the current fiscal, down from $58.24 a barrel it had realised in the same period a year back. Government-mandated gas prices dropped to $1.79 per million British thermal units from the $3.23 per mmBtu rate it got in October-December 2019.

The company board at its meeting on Saturday approved an interim dividend of 35 percent—Rs 1.75 on each equity share of Rs 5. It also approved the acquisition of 5 percent equity in Indian Gas Exchange Ltd (IGX) as a strategic investment.

IGX is a subsidiary of IEX, India's first and leading power exchange. IGX Ltd is presently India's first and only authorised gas exchange, which provides an automated platform for trading of natural gas, covering a wide range of products.

(Edited by : Ajay Vaishnav)