Emkay sees 23% upside on ONGC after shares hit 52-week high; reiterates ‘buy’ over Q1FY24 results
Emkay Global Financial Services has reiterated a ‘buy’ on Oil and Natural Gas Corporation (ONGC) after the stock scored a 52-week high at ₹180.25 during Monday's session, after the state-run refiner on August 11 reported a surge of 102 per cent in consolidated net profit at ₹17,383 crore in the April-June quarter of fiscal 2023-24 (Q1FY24). ONGC shares opened two per cent higher at ₹180 during today's session, compared to its previous close of ₹177.15 on Friday.
Emkay Global sees a potential upside of 23.9 per cent on ONGC's stock over the next 12 months against its current market price (CMP) of ₹177.2. ONGC reported a sizable 20 per cent beat on EBITDA, of Rs177.5 billion in Q1FY24, mainly led by better-than-expected realizations and lower dry-well write-offs.
PAT surpassed expectations by 25 per cent, standing at Rs100.2 billion, according to the brokerage. Also Read: ONGC Q1 Results: Consolidated net profit more than doubles to ₹17,383 crore, revenue drops 10% YoY The state-run petroleum giant's revenue from operations during the first quarter of current fiscal stood at ₹1,63,823 crore, registering a decline of 10 per cent, compared to ₹1,82,894 crore in the year-ago period.
Oil/gas production was largely in-line (down 3 per cent YoY each), at 5.31mmt/5.22bcm, while management attributed the output decline to temporary shut-downs and Cyclone Biparjoy. ONGC has officially stated its first KG-basin oil to start from Q3FY24 which will hence improve output, as per the brokerage.
‘’We keep FY24E/25E SA EPS largely unchanged, while slightly raising Mar-24E TP by 2 per cent to Rs220/sh (on value of investments and annual-report update). We maintain our positive stance on the upstream sector mainly on stable earnings outlook,
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