Jefferies maintained its ‘Buy’ rating on ONGC with a target price of ₹375, stating that the operational metrics in Q4FY25 were largely stable despite the earnings drag from dry well write-offs.
ONGC’s standalone EBITDA came in at ₹19,000 crore, up 9% YoY and flat sequentially, marginally below Jefferies’ estimates. However, PAT was 31% below projections due to the spike in exploration-related expenses. On a consolidated basis, EBITDA was 14% ahead of estimates, driven by a strong contribution from subsidiary HPCL, though PAT at ₹8,860 crore was still 3% below expectations.
Crude realization rose 2% QoQ but remained 9% lower YoY. While crude sales volumes increased 1% QoQ, gas sales fell 2%. The new well gas pricing helped keep overall gas realization flat for the quarter.
Jefferies noted that this was the second consecutive quarter of rising daily crude and gas production, a trend seen as supportive for ONGC’s future earnings trajectory.
“While Q4 bottom-line was marred by one-offs, core production and pricing remain healthy. ONGC is showing early signs of a sustained turnaround in upstream performance,” the note said.
Disclaimer: This article is based on the brokerage report by Jefferies. It does not constitute investment advice. Investors are advised to consult their financial advisors before making any investment decisions.
