ONGC stock jumps almost 5% as Jefferies sees over 50% upside; here's why the brokerage retains bullish outlook
₹271.10 apiece in intra-day deals on Tuesday, June 11, after global brokerage house Jefferies retained its bullish outlook on the stock as the central government's policy continuity should keep the oil PSU's profitability elevated. It stated that ONGC's profitability is to stay elevated compared to past averages.Following the announcement of the election verdict on June 4, where the BJP fell short of the 272 mark needed for a majority, the oil major's shares tanked almost 17 percent on that day.
Before today's gain, the stock was down almost 9 percent for the month of June. Even though it has recovered since then, Jefferies believes that this correction is excessive and presents an appealing entry opportunity for investors.The brokerage has a target price of ₹390 for ONGC, implying a 50.5 percent upside from its previous close.According to the brokerage, ONGC's ramp-up in KG basin production in Q3FY25 and accretion to profitability are key triggers to monitor going ahead.Meanwhile, in an earlier note, Jefferies also highlighted that ONGC's valuation is currently trading at a significant discount to the Nifty compared to its long-term average.The stock has already rallied 68 percent in the last 1 year and over 26 percent in 2024 YTD, giving positive returns in 5 of the 6 months so far in the current calendar year.Including today's rise, the stock has gained 1.5 percent in June so far after a 6.5 percent fall in May.
Meanwhile, it gave positive returns in the first 4 months of the year, advancing 5.5 percent in April, 1.3 percent in March, 4.5 percent in February and 23.5 percent in January.The stock hit its 52-week high of ₹292.95 on May 3, 2024, and a 52-week low of ₹152.55 on June 12, 2023. From its previous close of
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