Jefferies has maintained its buy rating on Oil and Natural Gas Corporation (ONGC) with a target price of ₹360 after the company posted first-quarter results largely in line with expectations at the operating level. ONGC reported standalone EBITDA of ₹187 billion, flat year-on-year and down 2% sequentially, with production volumes and realisations matching the brokerage’s estimates. However, profit after tax came in 8% below Jefferies’ forecast, primarily due to lower other income.
On a consolidated basis, ONGC’s EBITDA rose 18% year-on-year, also in line with estimates, driven by a strong performance from subsidiary Hindustan Petroleum Corporation Limited (HPCL). Consolidated profit after tax, net of minority interest, stood at ₹98 billion, broadly meeting Jefferies’ projections. The brokerage noted that daily crude and gas production has slipped after rising for two consecutive quarters, underscoring the operational challenges in sustaining production momentum.
Jefferies remains positive on ONGC’s earnings visibility, citing stable crude prices, resilient refining margins at HPCL, and the company’s continued focus on upstream investment. While the drop in production in the latest quarter bears watching, the brokerage believes the overall earnings trajectory remains intact, supporting its bullish stance on the stock.
Disclaimer: The views and recommendations made in this article are those of Jefferies. This article does not constitute investment advice. Investors should consult their financial advisors before making any investment decisions.
