CLSA has upgraded ONGC to a ‘High Conviction Outperform’ rating, setting a target price of ₹360/share, indicating a potential upside of 41.2% from the current market price (CMP) of ₹254.99.
Key Highlights:
- Production Growth: ONGC’s eastern offshore field ramp-up is expected to increase domestic oil and gas output by approximately 10% and 20%, respectively, by the end of 2025.
- Improved Gas Realizations: New gas production and increased share of gas from well interventions are expected to significantly boost blended gas realization.
- Windfall Tax Removal: The removal of the windfall tax could enable ONGC to realize more than $75/bbl if crude oil prices recover.
- Valuation Appeal: The stock is trading at a substantial discount to its historical averages and peer valuations, offering an attractive dividend yield of 6%.
CLSA highlights ONGC’s multiple growth triggers, including production ramp-up and improving realizations, alongside its compelling valuation as reasons for its bullish outlook.
Disclaimer: The above analysis is based on inputs provided and is for informational purposes only. It does not constitute financial advice. Readers are advised to consult their financial advisors before making any investment decisions.
