Analysts' picks: ONGC
Goldman Sachs has reiterated its ‘sell’ rating on ONGC with a 12-month target price of Rs 630, citing regulatory uncertainty and muted volume growth as the main concerns.
CMP: Rs 882.90
Target price: Rs 630
Goldman Sachs has reiterated its ���sell��� rating on ONGC with a 12-month target price of Rs 630, citing regulatory uncertainty and muted volume growth as the main concerns.
���We continue to believe that key positive catalysts for the stock, such as a gas price hike and fuel pricing reforms, are in government hands, and hence unpredictable,��� a Goldman Sachs note to clients said.
���We also think that ONGC will eventually have to pay a subsidy in 4QFY09, given the government���s reluctance to issue more oil bonds despite oil marketing companies��� (OMCs) suffering from additional high interest costs, inventory loss and mark-to-market losses (Rs 5,000 crore) on oil bonds in FY09 Moreover, OMCs are again incurring losses on gasoline sales, which could sequentially increase ONGC���s 1QFY10E subsidy,��� the note added.
The brokerage has forecast an earning per share of Rs 80.27 for the current financial year, which is below consensus estimates.
Target price: Rs 630
Goldman Sachs has reiterated its ���sell��� rating on ONGC with a 12-month target price of Rs 630, citing regulatory uncertainty and muted volume growth as the main concerns.
���We continue to believe that key positive catalysts for the stock, such as a gas price hike and fuel pricing reforms, are in government hands, and hence unpredictable,��� a Goldman Sachs note to clients said.
���We also think that ONGC will eventually have to pay a subsidy in 4QFY09, given the government���s reluctance to issue more oil bonds despite oil marketing companies��� (OMCs) suffering from additional high interest costs, inventory loss and mark-to-market losses (Rs 5,000 crore) on oil bonds in FY09 Moreover, OMCs are again incurring losses on gasoline sales, which could sequentially increase ONGC���s 1QFY10E subsidy,��� the note added.
The brokerage has forecast an earning per share of Rs 80.27 for the current financial year, which is below consensus estimates.
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