Buy ONGC., target price Rs 365: ICICI Securities

ICICI Securities has maintained a buy call on Oil And Natural Gas Corporation with a target price of Rs 365 (earlier Rs 390). The current market price of Oil And Natural Gas Corporation is Rs 254.5.

ONGC., incorporated in 1993, is a Large Cap company with a market cap of Rs 320168.11 crore, operating in Gas & Petroleum sector.

Oil And Natural Gas Corporation's 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 31-12-2024, the company has reported a Consolidated Total Income of Rs 168507.77 crore, up 3.70% from last quarter Total Income of Rs 162492.52 crore and down -.66% from last year same quarter Total Income of Rs 169628.12 crore. The company has reported net profit after tax of Rs 10148.32 crore in the latest quarter.

The company?s top management includes Mr.Arun Kumar Singh, Dr.Madhav Singh, Dr.Prabhaskar Rai, Mrs.Reena Jaitly, Mr.Manish Pareek, Mr.V Ajit Kumar Raju, Mr.Syamchand Ghosh, Mr.Pankaj Kumar, Ms.Sushma Rawat, Mr.Om Prakash Singh, Mr.Manish Patil, Mr.V C Tongaonkar, Mr.Praveen Mal Khanooja. Company has S Bhandari & Co. as its auditors. As on 31-12-2024, the company has a total of 1,258 Crore shares outstanding.

Investment Rationale
ONGC?s Q3FY25 adjusted EBITDA/PAT (standalone) of Rs 185.1 billion/82.4 billion (+25/-14% YoY) was above I-Sec?s estimate on EBITDA (Rs 177.1bn) but below that on PAT (Rs 98.7bn) driven by lower other income and higher depreciation. Oil + gas output of 10.35mtoe was flat YoY (+1% QoQ) with VAP sales of 0.66mt, down 16% YoY. Consolidated EBITDA/PAT of Rs 261 billion/ 86.2 billion declined 21/17% YoY due to weaker performance by subsidiaries MRPL & OVL, partly offset by higher YoY earnings from HPCL. Realisation trends and ramp-up of KG basin asset are the key triggers over FY25-27E, and KG 98/2 is the key to production growth and earnings strength. Recovery in HPCL, MRPL earnings and lower leverage are added drivers. ICICI Securities has reiterated a BUY with a revised target price of Rs 365.

Promoter/FII Holdings
Promoters held 58.89 per cent stake in the company as of 31-Dec-2024, while FIIs owned 7.53 per cent, DIIs 19.39 per cent.