Brokerages confident on ONGC’s positive growth guidance: Here’s what brokerages have to say

The brokerage houses are positive on the stock of ONGC on the back of growth guidance. The company said that the growth will be maintained beyond FY26. This bodes well with an improved realisation for oil & gas, the rising share of newer fields, and better productions at ONGC Videsh, said Elara Securities in a research report. Here are some views by brokerages on ONGC after it released its Q4 results: 

Motilal Oswal

The brokerage house maintained its “Buy” rating on the stock with an unchanged target price of Rs 340. It also raised the total production expectations by 2% and 3% for FY25 and FY26, respectively. Motilal values the business of ONGC seven times the adjusted earnings per share of Rs 34 for FY26. 

Elara Securities

The brokerage house has iterated “Buy” and raised the target price to Rs 343 from Rs 326, earlier. However, Elara slashed earnings per share estimates by 6% on a slower ramp-up of the KG field in FY25. “We value ONGC standalone at 4.2x FY26E EBITDA (from 4.0x), OVL at oil & gas reserves on EV/boe at USD 3.8x (unchanged) and investments in listed entities at 50% discount over CMP,” said Elara Securities.

Prabhudas Lilladher

The broking firm expects a growth rate of 6% and 11% in total oil and gas production, respectively over FY24-26. “The stock is currently trading at 6.2/6x FY25/26 EPS. We maintain the “Hold” rating with a target price of Rs 265, valuing the standalone business at 7x FY26 adj EPS of Rs 28.1 and adding the value of investments of Rs 68,” said Prabhudas Lilladher. 

Anand Rathi

The brokerage firm expects the company’s volumes are likely to recover due to the ramp-up of its KG98/2 field. “We prefer upstream companies, given greater clarity on oil and gas realisations along with volume growth,” said Rathi in its research report. The brokerage house kept the “Buy” rating unchanged, with a target price of Rs 323 per equity share. 

Further, ONGC recorded an increase of Rs 1.66 lakh crore in revenue from operations for the fourth quarter of the current fiscal year, compared to Rs 1.64 lakh crore recorded in the same period of the previous year. State-owned Oil and Natural Gas Corporation reported a consolidated net profit of Rs 11,526.53 crore in Q4 of FY24, an increase of 78% on year against Rs 6,478.23 crore posted in Q4 of FY23.