ONGC share price with gains of more than 2% among highest Nifty 50 gainers today
ONGC share price with gains of more than 2% was the largest gainer amongst Nifty stocks in morning trades on Monday. The stock is also trading close to its 52-week highs. The investor sentiments that earlier had taken some beating with decline in Brent crude prices however have rebounded will .
The analysts don’t see much impact to ONGC’s net crude oil realisations considering the fact that there is a windfall tax that continues to get adjusted. Thus, net realizations for Upstream oil producers as ONGC are estimated to remain close to $70 as per various analyst estimates. For Instance, analysts at JM Financial had estimated Brent to average at $75 a barrel during FY24 had estimated ONGC’s net realizations at $75 a barrel.
Also Read- What next for investors after Nifty at 21,000 and Sensex at 70,000 Hence with Brent Crude cooling down to $76 a barrel level, not much impact is expected on ONGC’s earnings. For ONGC the key upside trigger thereafter can come from rise in oil and gas production. ONGC’s gas production from KG D6 basin is already being anticipated to rise.
Analysts at Motilal Oswal Financial Services Ltd in their recent report have said that ONGC has reiterated its commitment to raise production to 50mmtoe by FY28; mmtoe stands for million metric tonne of oil equivalent. . This will be driven by 23 ongoing projects (9 infrastructure projects and 14 development projects) for a total capex of ₹60000 crore Gas production from Cluster II of KG-DWN-98/2 commenced in Mar’20, while oil production is also expected to commence soon.
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