Buy ONGC, target price Rs 330: Motilal Oswal Financial Services

Motilal Oswal Financial Services has a buy call on Oil And Natural Gas Corporation (ONGC) with a target price of Rs 330. The current market price of Oil And Natural Gas Corporation Ltd. is Rs 250.9. ONGC, incorporated in 1993, is a Large Cap company with a market cap of Rs 315513.40 crore, operating in Gas & Petroleum sector.

Oil And Natural Gas Corporation, key products/revenue segments include Oil Crude, Gas Natural, Naphtha, Ethane, Propane, Butane, Subsidy, Aviation Turbine Fuel (ATF), Other Operating Revenue, LSHS, Electricity, Mineral Turpentine Oil (MTO), HSD, Processing Charges, Others for the year ending 31-Mar-2024.

Financials

For the quarter ended 30-09-2024, the company has reported a Consolidated Total Income of Rs 162492.52 crore, down -4.17 % from last quarter Total Income of Rs 169562.26 crore and up 8.77% from last year same quarter Total Income of Rs 149388.45 crore. The company has reported net profit after tax of Rs 9890.59 crore in latest quarter.

Investment Rationale
ONGC has guided for 11% growth in total production volume over FY24-FY27, driven by rising production from KG 98/2 asset, Daman upside development, and monetization of stranded gas reserves. ONGC is trading at 2.7x FY26E EV/EBITDA (SA) and 7 .2x FY26E P/E (SA). Motilal Oswal Financial Services values the company at 8x Dec?26E adj. EPS of Rs 30 and add the value of investments to arrive at the target price of Rs 330 (29% upside potential). The brokerage reiterates a BUY rating on the stock.

Promoter/FII Holdings
Promoters held 58.89 per cent stake in the company as of 30-Sep-2024, while FIIs owned 8.12 per cent, DIIs 18.99 per cent.