Jefferies has reiterated its ‘Buy’ rating on Oil and Natural Gas Corporation (ONGC), assigning a target price of ₹375, implying significant upside potential from the current market levels.
Following a recent US roadshow, Jefferies highlighted management’s confidence in achieving a 10–12% production CAGR over FY26–30, supported primarily by growth in Mumbai High, ONGC’s flagship offshore asset. The optimism is further anchored by BP’s success in the Rumaila field, which experienced 40% production growth in a geologically similar reservoir, offering a positive comparative benchmark for ONGC.
Additionally, Jefferies noted that reforms in gas and crude pricing are likely to play a pivotal role in driving profitability, supporting a 14% EPS CAGR for FY25–27. Despite robust fundamentals and earnings visibility, Jefferies believes the stock is currently pricing in a conservative crude assumption of US$55 per barrel, making the risk-reward ratio highly favourable.
The brokerage maintains a positive outlook on ONGC, underscoring the potential for strong earnings recovery, volume-led growth, and policy support in the sector.
Disclaimer: This article is for informational purposes only and should not be construed as investment advice. Investors are advised to consult their financial advisors before making any investment decisions.
