ICICI Direct recommended hold rating on Oil and Natural Gas Corporation with a target price of Rs 110 in its research report dated February 17, 2020.
ICICI Direct’s research report on Oil and Natural Gas CorporationONGC declared its O3FY20 results that were below our estimates on the profitability front, mainly due to higher depreciation & amortisation costs and lower other income. Revenues declined 3.2% QoQ at Rs 23710.1 crore (our estimate: Rs 22823.2 crore) on account of marginally lower realisations as well as sales volume QoQ. The oil & gas production was largely in line with our estimates. As per expectations, the quarter witnessed nil subsidy burden while net realisations were at US$59.7/bbl. EBITDA during the quarter declined 7.5% QoQ and came in at Rs 12298.3 crore (our estimate: Rs 11708.7 crore). Subsequently, reported PAT declined 33.7% QoQ to Rs 4151.6 crore (our estimate: Rs 5932.3 crore).OutlookWe have a HOLD rating on the stock with a target price of Rs 110/share. We value core business i.e. standalone & OVL at Rs 90/share (6x FY22E core earnings) & investments at Rs 20/share (50% discount to current MCap).For all recommendations report, click hereDisclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.Exclusive offer: Use code “BUDGET2020” and get Moneycontrol Pro’s Subscription for as little as Rs 333/- for the first year. First Published on Feb 18, 2020 01:03 pm