Macquarie has upgraded Oil and Natural Gas Corp (ONGC) rating to outperform from neutral and raised target price to 295 rupees from 293 rupees on compelling valuations after recent fall in stock prices.
We believe that the current risk-reward is favourable, as the stock is more than adequately factoring in subsidy risks and a lack of near-term volume growth, the Australian bank said in a note.
It also expects ONGC benefiting $2.1 billion, if Cairn India gets shareholder approval of royalties to be cost recoverable form the Barmer Rajasthan block.
At 3.07 p.m., shares in ONGC were at 258.05 rupees, down 1.19 percent.
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