Kotak Institutional Equities has upgraded Oil and Natural Gas Corporation (ONGC) from ‘Add’ to ‘Buy’ and hiked its target price (TP) to ₹315 from ₹285. At the current market price (CMP) of ₹265.99, this reflects a potential upside of 18.4%.
Key Highlights:
- Favorable Policies and Oil Price Trends: Recent policy developments, higher oil prices, and a weaker Indian Rupee (INR) are seen as positives for ONGC.
- Production Boost: The KG-98/2 block is expected to drive near-term production growth, while a tie-up with BP augurs well for long-term prospects.
- Earnings Growth: FY2026-27 earnings estimates have been raised by 7-10%, supported by favorable market trends.
- Geopolitical Tailwinds: The recent rise in oil prices, driven by enhanced sanctions on Russia, is expected to benefit ONGC in the short term.
- Currency Impact: While oil prices might stabilize, a weaker INR is expected to remain a long-term positive for the company.
Kotak’s optimism is rooted in ONGC’s robust production growth prospects and its ability to capitalize on favorable external factors. Investors are advised to track further developments, especially regarding global oil prices and currency movements.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investors should consult their financial advisor before making any investment decisions.