ONGC Share Price Today Live Updates: ONGC shares gain 7%; trades among top gainers in Nifty 50 pack

Oil and Natural Gas Corporation’s (ONGC) operating profit stood at Rs186.2bn (up 7% QoQ, PLe: Rs173.2bn). PAT came in at Rs89.4bn (down 9.4% QoQ, PLe: Rs94.7bn) on a standalone basis. Oil and gas production declined QoQ and YoY. Curremt production from KG Basin stands at 12,000bopd of oil and 1.6mmscmd of gas. Production guidance for FY25 stands at 22.3mmt of oil and 21.6bcm of gas. Going ahead, we build in 3.4% CAGR and 7% CAGR volume growth in oil and gas production, respectively, over FY24-FY26E. The stock is currently trading at 7.3/7.4x FY25/26 EPS. We upgrade rating from ‘Reduce’ to ‘Hold’ with a TP of Rs322 due to correction in stock price, valuing the standalone business at 9x FY26 adj EPS and adding the value of investments.

Top gainers on the NSE as at 12 noon:

ONGC (7.11%), Coal India (5.16%), Adani Enterprises (3.11%), Adani Ports (2.90%), JSW Steel (2.75%)

Top losers:

IndusInd (-2.46%), Bharti Airtel (-0.59%), Asian Paints (-0.40%), Kotak Mahindra (-0.19%), Titan (-0.17%)

ONGC shares were up 7.17% on the NSE to trade at ₹328.05 as at 11.55 am.

On the BSE, the stock rose 7.05% to trade at ₹327.80.

Seamec informed that the vessel “Seamec Diamond” has been put on hire for ONGC Contract through HAL Offshore Ltd.

Seamec stock rises 1.51% on the NSE, trading at ₹1,520.95

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We maintain BUY (unchanged TP of INR 325) as risk-reward is still reasonable and our expectation that OPEC+ will continue to support crude around USD 75-80/bbl; the government allows ONGC/Oil India to make net crude realisation of ~USD 75/bbl. Further, ONGC is likely to see 10-15% output growth with ramp-up of output from KG DW 98/2 block. ONGC is also a robust dividend play (4-6%). Every USD 5/bbl rise/fall in net crude realisation results in increase/decrease in our EPS and valuation by 6-8%. ONGC is also a robust dividend play (4-6%). At CMP, ONGC trades at 6.2x FY26E consolidated EPS and 1.0x FY26E BV.

Shares of ONGC traded at ₹327.60 on the NSE, higher by 7.02% as at 11.14 am.

ONGC reported adjusted EBITDA/PAT (standalone) of INR 178.6bn (-2/+7% YoY/QoQ)/INR 89.4bn (-11/-9% YoY/QoQ) vs I-Sec’s estimate of INR 174/INR 92.7bn in Q1FY25. QoQ growth in EBITDA was driven by lower opex while higher depreciation, tax rate and lower other income led to earnings (QoQ) decline and miss vs our estimates. Consolidated EBITDA/PAT of INR 226bn/ 99.3bn declined 26/30% YoY due to weaker performance by subsidiaries HPCL/MRPL’s earnings, partly offset by some strength seen in OVL earnings in Q1FY25. Going forward, ramp-up of the KG basin asset remains the key performance driver over FY25-26E – this remains the key to production growth and earnings strength. We also expect a recovery in HPCL/MRPL’s earnings prospects coupled with reducing leverage in ONGC’s consolidated balance sheet. Reiterate BUY. 

ONGC has guided for 12%/27% growth in crude oil/gas production volume over the next three years, driven by rising production from KG 98/2 asset, Daman upside development, and monetization of stranded gas reserves. While volume guidance is upbeat, execution is vital, and should ONGC achieve guided volumes, we see upside risk to our and Street earnings estimates. 

ONGC is trading at 3.3x FY26E EV/EBITDA (SA) and 8.2x FY26E P/E (SA). We value the company at 8x FY26E adj. EPS of INR32 and add the value of investments to arrive at our TP of INR360 (18% upside potential). We reiterate our BUY rating on the stock.

ONGC share price rallied 7.17% on the NSE to trade at ₹328.05 as at 10.17 am.

Buy Call, Target Rs 390

Q1 Standalone EBITDA Was 3% Ahead Of Estimates

Q1 Domestic Production Was Broadly In-line

Realisations Were Slightly Ahead Of Expectations

Q1 PAT Was In-line With Estimates & Consensus, Offset By Higher D&A And Interest Expense

Growth Guidance On Production Especially Krishna Godavari Basin Key To Watch Out For

Premium Price Realisation From New Wells In Nomination Fields Key To Watch Out For

We believe ONGC faces a ‘no-win’ predicament: earnings are largely capped as the GoI imposes a windfall tax >USD75/bbl while, below this threshold, its earnings go into a free fall as realisations drop in tandem with global crude prices. The GoI has also capped ONGC’s nomination gas price at USD6.5/mmbtu with increase in production the only remaining avenue for growth. Maintain ‘REDUCE’ while raising the TP to INR245 (+17%) driven by the MTM value of investments.

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• ONGC reported a standalone profit of 89.38 billion rupees ($1.06 billion) for the three months to June 30, beating analysts’ average estimate of 85.85 billion rupees, per LSEG data.
• The company’s standalone earnings exclude profit from joint ventures, refining and marketing and profit from outside India operations.
• ONGC’s crude oil price realisation, or the price at which it sells the product, grew 8.8% to $83.05 per barrel, compared with $76.36 per barrel a year ago.
• Its revenue from operations rose 4% to 352.66 billion rupees.
• However, the company’s profit still fell 15%, which analysts attributed to the government’s windfall tax on petroleum crude - a tax levied on specific industries when they gain a sudden boost in their profits.
• ONGC’s expenses swelled 19% to 253.71 billion rupees, led by an 18% rise in depreciation, depletion, amortisation and impairment costs.

(Reuters)

State-owned Oil and Natural Gas Corporation (ONGC) on Monday reported a 15 per cent drop in its June quarter net profit on higher exploration cost write-off.

Its net profit of Rs 8,938.10 crore in April-June - the first quarter of the current 2024-25 fiscal year - compared to Rs 10,526.78 crore earnings in the same period of last year, according to a stock exchange filing by the company.

The profit was also lower sequentially compared to Rs 9,869.37 crore in the January-March quarter.

India’s largest crude oil and natural gas producer wrote off Rs 1,669.73 crore cost incurred in the unsuccessful survey and drilling of wells to find oil and gas. This compared to Rs 1,015.81 crore in April-June 2023.

Its revenue from operations rose to Rs 35,266.38 crore in the first quarter from Rs 33,814.33 crore a year back.

The higher write-off negated gains from the oil price increase.

ONGC, in the June quarter, got USD 80.64 for every barrel of crude oil it produced and sold to refiners for turning into fuels like petrol and diesel as opposed to USD 70.64 per barrel gross realisation last year.

Oil production was almost flat at 4.629 million tonnes, the company said in a statement.

Natural gas output, however, fell 3.6 per cent to 4.86 billion cubic metres. Also, the price realised on gas dropped to USD 6.5 per million British thermal units from USD 6.71 in April-June 2023.

ONGC said it has made a total of five oil and gas discoveries so far in the current financial year. It, however, did not either give the reserve estimates or the potential production they could add.

(PTI)

ONGC shares rise 5.85% on the NSE to trade at ₹324 as at 9.43 am.