ONGC share price gains almost 4% post Q1 results as operating performance came inline with the analyst expectations

Stock Market Today: Oil and Natural Gas Corporation (ONGC) share price opened almost 4% higher on Tuesday post its Q1 results that were declared on Monday post market hours.

ONGC share price opened at ₹314.80 more than 1% higher than previous close of ₹310.25, however continued to gain there after in morning trades on Tuesday on the NSE intraday highs of ₹322.45 marking gains of almost 4% (3.93%). ONGC share price was also among key gainers among the Nifty-50 stocks.

ONGC net profit at about ₹8938 crore came 10.8% lower year-on-year and 9% lower sequentially. Its Gross revenues at ₹35,266 crore grew 4.3% year on year.

The 1QFY25, crude oil sales stood at 4.6mmt (million metric ton) about 2% lower year-on-year, while gas sales came in line at 3.8bcm (billion cubic meters) about 6% lower yoy, flat sequentially.

Analysts at Jefferies India Pvt ltd in their first cut post results said that Q1 Standalone Earnings before interest, tax, Depreciation and amortisation (Ebitda) at ₹18617 Crore was 3% ahead of Jefferies estimates with domestic production (2% lower sequentially) broadly inline while realizations were slightly ahead of expectations.

Analysts at Motilal Oswal Financial performance also said that the Ebitda met their estimates.

The crude price net realisations as per the company release at $83.1 a barrel was 8.8% higher year-on-year (up 10.4% y o y in rupee terms)

Net profit though declined however Jefferies said was inline with its estimates and consensus, offset by higher Depreciation and amortisation and interest expense. Lower other income and write offs pertaining to dry wells also was among other reasons for decline in reported net profit.

Analysts generally have remained positive on ONGC's prospects helped by expected rise in production, healthy Oil realisations, rising gas prices for its own domestic produce.

However most analysts will review their ratings post analysts concal. Key things to watchout as per analysts is growth guidance on production especially from KG basin, by the government, premium price realization from new wells in nomination fields and capex outlook .

For now Jefferies target price for ONGC stands at ₹390 indicating more than 20% upside. Motilal Oswal Financial Services also has a Buy rating for the stock

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