ONGC share price: Buy Oil And Natural Gas Corporation, target price Rs 190: HDFC Securities

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Promoters held 60.4 per cent stake in the company as of Sept 30, 2020, while FIIs held 7.7 per cent, DIIs 17.5 per cent and public and others 14.4 per cent.

Time period given by analyst is one year when Oil And Natural Gas Corporation Ltd. price can reach defined target.

Oil And Natural Gas Corporation Ltd., incorporated in the year 1993, is a Large Cap company (having a market cap of Rs 182099.54 Crore) operating in Gas & Petroleum sector.

Oil And Natural Gas Corporation Ltd. key Products/Revenue Segments include Oil Crude, Gas Natural, Naphtha, Ethane, Propane, C2/C3 (Ethane/Propane), Butane, HSD, Subsidy, Superior Kerosene Oil, Electricity, LSHS, Other Operating Revenue, Aviation Turbine Fuel (ATF), Mineral Turpentine Oil (MTO), Processing Charges, Others for the year ending 31-Mar-2021.

Financials

For the quarter ended 30-06-2021, the company reported a Consolidated Total Income of Rs 109301.82 Crore, down -7.53 % from last quarter Total Income of Rs 118206.16 Crore and up 71.92 % from last year same quarter Total Income of Rs 63575.47 Crore. Company reported net profit after tax of Rs 6242.23 Crore in latest quarter.

Promoter/FII Holdings

Promoters held 60.4 per cent stake in the company as of Sept 30, 2020, while FIIs held 7.7 per cent, DIIs 17.5 per cent and public and others 14.4 per cent.

HDFC Securities has buy call on Oil And Natural Gas Corporation Ltd. with a target price of Rs 190. The current market price of Oil And Natural Gas Corporation is Rs 142.6.Time period given by analyst is one year when Oil And Natural Gas Corporation Ltd. price can reach defined target.Oil And Natural Gas Corporation Ltd., incorporated in the year 1993, is a Large Cap company (having a market cap of Rs 182099.54 Crore) operating in Gas & Petroleum sector.Oil And Natural Gas Corporation Ltd. key Products/Revenue Segments include Oil Crude, Gas Natural, Naphtha, Ethane, Propane, C2/C3 (Ethane/Propane), Butane, HSD, Subsidy, Superior Kerosene Oil, Electricity, LSHS, Other Operating Revenue, Aviation Turbine Fuel (ATF), Mineral Turpentine Oil (MTO), Processing Charges, Others for the year ending 31-Mar-2021.For the quarter ended 30-06-2021, the company reported a Consolidated Total Income of Rs 109301.82 Crore, down -7.53 % from last quarter Total Income of Rs 118206.16 Crore and up 71.92 % from last year same quarter Total Income of Rs 63575.47 Crore. Company reported net profit after tax of Rs 6242.23 Crore in latest quarter.Promoters held 60.4 per cent stake in the company as of Sept 30, 2020, while FIIs held 7.7 per cent, DIIs 17.5 per cent and public and others 14.4 per cent.

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Listen In: Will gas price hikes turn the fortunes of ONGC and Oil India?

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Transcript

Hi there, Good Morning. Welcome to ETMarkets Morning, the show about money, business and markets. I am Nikhil Agarwal. Let’s start with the headlines first.

Now lemme give you a quick glance on the state of the markets.

Dalal Street is likely to have a negative start this morning. Nifty futures on the Singapore Exchange traded 130 points lower at 8:10 hours (IST). Asian stock markets tumbled on Tuesday as spikes in oil prices stoked further worries about inflation and monetary tightening globally. MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.89 per cent.

Elsewhere, the yield on 10-year Treasuries was at 1.48%. The US dollar drifted below a one-year high versus major peers on Tuesday as traders waited on key US payrolls data at the end of the week for clues on the timing of a tapering of Federal Reserve stimulus and the start of interest rate hikes. Oil prices eased on Tuesday after climbing to their highest levels in years in the previous session on the decision by OPEC and allied major oil producers to maintain restraint on supply. Brent crude was down by 3 cents at $81.83 a barrel.

That said, here’s what is making news.

The Securities and Exchange Board of India (Sebi) has proposed changes to fixing price bands and allocation of shares to rich investors in initial public offerings (IPOs). The regulator intends to introduce a minimum price band in all public issues, where the upper price should be at least 5 per cent more than the floor price. The regulator has also proposed dividing the non-institutional investors (NII) category, under which High Networth Investors (HNIs) apply in IPOs, into two. Under this, one-third of the allocation earmarked for applications ranging above Rs 2 lakh and up to Rs 10 lakhs would be one category. Two-thirds of the shares would be reserved for applications above Rs 10 lakhs from HNIs.

Gas price hikes will significantly raise earnings prospects for ONGC and Oil India while adding another pillar to the earnings upgrade cycle for Reliance Industries, said Morgan Stanley. India’s gas prices have been raised by 61-69%, reversing three years of decline, which should ease investor concerns about government intervention, the firm said. Morgan Stanley expects a further hike of over 82% in the next revision scheduled for April 2022 as global shortages have led to four global benchmarks hitting record highs.

Sanjeev Bikhchandani said a good number of the current set of startups going public, whose data he is privy to, have a path to profitability in two-three years as public markets won’t keep backing loss making companies for the next five to 10 years. Bikhchandani, who still owns more than 15% in Zomato after its initial public offering (IPO), said his company, Info Edge, will continue to remain a long-term investor in the startups it is backing. He said Info Edge had first invested in PolicyBazaar more than a decade ago and still remains a shareholder in the company that has filed for a Rs 6,017 crore IPO.

LASTLY,

Kotak Institutional Equities said the recent rally in shares of state-owned energy companies defies ‘fundamental logic’. Kotak said earnings of electric utilities such as NTPC and Power Grid are regulated and linked to their equity base while that of downstream oil companies may be at risk if they are unable to raise retail prices of automobile fuels to pass on crude price rise. Shares of NTPC and Power Grid Corp have gained 13% and 7% respectively in the past two weeks. On Monday, Power Grid shares ended down 0.1% at Rs 191.55. NTPC shares ended up 4.1% at Rs 145.55 even as the company denied reports of plans to raise Rs 15,000 crore through an initial public offering of three units.

NOW Before I go, here is a look at some of the stocks buzzing this morning…

SBI is rushing to raise funds before the interest rate cycle turns following the Reserve Bank of India’s expected liquidity normalisation measures. India’s largest lender is set to sell Additional Tier 1 bonds worth up to Rs 6,000 crore, which are expected to open for subscription during Navratri festival next week.

Adani Ports, which is rapidly expanding its network on the east coast, is set to enter the maritime sector in West Bengal as it has emerged as the top bidder for operating a berth at Haldia Dock Complex.

Amid the ongoing spat with the board of ZEEL, Invesco has urged the National Company Law Tribunal (NCLT) to pass an order to ensure the convening of the company’s Extraordinary General Meeting (EGM).

French insurance firm Axa SA will sell around 175 crore equity shares of ICICI Lombard General Insurance via block deal on Tuesday.

Do also check out over two dozen stock recommendations for today’s trade from top analysts on ETMarkets.com.

That’s it for now. Stay with us for all the market news through the day. Happy investing!

Why RIL is better than ONGC to play on gas price rise

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Stock Score, Analysts' Ratings & Recommendations EARNINGS FUNDAMENTAL RELATIVE VALUATION RISK PRICE MOMENTUM Stock score of Oil and Natural Gas Corporation Ltd moved up by 3 in 3 months on a 10-point scale. View Latest Stock Report

Stock Analysis Stock score of Oil and Natural Gas Corporation Ltd is 10 on a scale of 10. View Stock Analysis »

ONGC

Gas prices have gone up by about 50 per cent globally this calendar. That is kind of being priced in now with a 62 per cent hike, says, CIO & MD,India and the world have gone through several self-inflicted and natural problems. Now, some of the natural gas price hikes are because of the world coming out of lockdowns. This year’s opening up has put supply chain pressure on all gas companies, as there is a shortage of gas. On the other hand, ESG and environmental factors are also restricting carbon-based trades. Ultimately, you need carbon, you need fossil fuels, because that is more than 75 per cent of the world’s energy requirements. In this crossfire, the prices are going up, and therefore, the markets going down, as it creates an input pressure right from factories to even countries.But I think there is enough resilience left in various pockets of the Indian market and I think there might be a correction or two, but I believe, the trend is intact on the upward path.Looking at the gas prices in India, they revise the prices once every couple of years, whereas in the rest of the world it happens real time. Gas prices have gone up by about 50 per cent this calendar year globally, and that was not reflected. That is kind of being priced in now with a 62 per cent hike. Hence, companies like ONGC, Oil India will see significant revisions in their earnings on the upside. But the risk that you run into with ONGC is a regulatory risk of capping the prices. A nicer way of playing this theme would be with Reliance Industries, which will probably see about a 5-7 per cent earnings upgrade. Also, since we are going into the winter season where demand for gas and oil is high, Reliance Industries will be a natural beneficiary.Coming to banks, I would go with Canara Bank and other PSU banks. Canara Bank still trades at about 0.4 times book, which is less for a normal range of about 0.8 or one times. I think its capital position is strong, NPAs are going down, provisioning is far better and corporate risk is kind of coming down. So I think within the banking sector, Canara Bank looks good.