Macquarie Research Equities' ‘neutral’ rating to ONGC
Macquarie Research Equities has given a ‘neutral’ rating to ONGC, as it feels that attractive valuations are offset by lack of earnings growth.
By ET Bureau |
ONGC
cmp: Rs 1,023.30
target price: Rs 995
Macquarie Research Equities has given a ���neutral��� rating to ONGC, as it feels that attractive valuations are offset by lack of earnings growth.
���ONGC is trading at undemanding valuations of 7.7 times FY3/09 (estimated), but it also lacks growth, as a corresponding rise in subsidy burden wipes out a bulk of its gain from a rise in oil price realisations,��� the Macquarie note to clients said.
Earlier this week, ONGC Videsh (OVL), the wholly-owned subsidiary of ONGC, had announced a recommended preconditional cash offer to acquire Imperial Energy Corp, an oil E&P (exploration and production) company with assets in Russia and Kazakhstan for ��1.4 billion.
The brokerage is of the view that tax laws in Russia are very unfavourable to E&P companies as an additional risk is that the Russian government has also been forcefully taking over oil assets from private companies.
cmp: Rs 1,023.30
target price: Rs 995
Macquarie Research Equities has given a ���neutral��� rating to ONGC, as it feels that attractive valuations are offset by lack of earnings growth.
���ONGC is trading at undemanding valuations of 7.7 times FY3/09 (estimated), but it also lacks growth, as a corresponding rise in subsidy burden wipes out a bulk of its gain from a rise in oil price realisations,��� the Macquarie note to clients said.
Earlier this week, ONGC Videsh (OVL), the wholly-owned subsidiary of ONGC, had announced a recommended preconditional cash offer to acquire Imperial Energy Corp, an oil E&P (exploration and production) company with assets in Russia and Kazakhstan for ��1.4 billion.
The brokerage is of the view that tax laws in Russia are very unfavourable to E&P companies as an additional risk is that the Russian government has also been forcefully taking over oil assets from private companies.
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