I-Sec maintains Buy on ONGC, lowers target price to Rs 350

ICICI Securities has a buy call on Oil And Natural Gas Corporation with a revised target price of Rs 350 (Earlier Rs 365). The current market price of Oil And Natural Gas Corporation is Rs 243.15. ONGC, incorporated in 1993, is a Large Cap company with a market cap of Rs 307260.74 crore, operating in Gas & Petroleum sector.

Oil And Natural Gas Corporation Ltd. 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 31-03-2025, the company has reported a Consolidated Total Income of Rs 173788.62 crore, up 3.13% from last quarter Total Income of Rs 168507.77 crore and up 2.30% from last year same quarter Total Income of Rs 169875.25 crore. The company has reported net profit after tax of Rs 8217.12 crore in 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. LLP as its auditors. As on 31-03-2025, the company has a total of 1,258 crore shares outstanding.

Investment Rationale
ONGC?s Q4FY25 saw adjusted EBITDA/PAT (standalone) of Rs 181 billion/Rs 64.5 billion (9%/-35% YoY) with 7% revenue growth YoY. However, this was offset by sharply higher exploration write-offs, denting net earnings. Consol. EBITDA/PAT stood at Rs 263/Rs 73 billion (+10%/-35% YoY). FY25 EBITDA/PAT (standalone) of INR 724/INR 356bn, rose 4.6%/fell 10% YoY. Oil & gas output for Q4/FY25 slipped 1.8%/1.7% YoY to 10.3mt/41.1mt. Management guidance remains bullish for oil & gas output with ~15?18mmscmd gas production growth and ~20kb/d of oil production growth over FY26?28. Realisations trends, however, are bearish; our revised estimate is $67?70/bbl for FY26?27, driving EPS downgrades of 18.1%/15.5% for FY26E/FY27E (FY28E of Rs 51.4/share introduced). Target price was revised to Rs 350 (earlier Rs 365). The brokerage has retained a BUY rating.

Promoter/FII Holdings
Promoters held 58.89 per cent stake in the company as of 31-Mar-2025, while FIIs owned 7.1 per cent, DIIs 19.88 per cent.