ONGC, Oil India: Cheapest oil upstream stocks globally are a compelling 'Buy'
ONGC and Oil India are among the cheapest upstream stocks worldwide, trading on estimated FY28 EV/Ebitda at just 2.9x and 3.6x, compared to the global average of 4.2x (one year forward) and 4.0x (two year forward).
- Sep 12, 2025,
- Updated Sep 12, 2025 10:23 AM IST
Oil and Natural Gas Corporation (ONGC) and Oil India have seen their share prices fall by 18% and 32% respectively over the past 12 months, resulting in valuations that suggest crude oil prices far below historical norms. According to Antique Stock Broking, these valuations do not reflect the firm crude price, which has consistently remained above $65 per barrel, buoyed by Chinese stockpiling and ongoing geopolitical concerns. Even if crude were to dip to $60 per barrel in the near term, this would still be well above the implied prices currently factored into ONGC and Oil India market prices.
Both ONGC and Oil India are trading at significant discounts to their global upstream peers, as measured by asset and cash flow metrics. This underperformance is attributed to the legacy impact of regulated pricing, such as the administered pricing mechanism (APM) for gas and previous oil price caps, in addition to the maturity of legacy fields and subdued production growth.
"We believe these concerns are not relevant any more. Importantly, both companies are now entering a growth phase: ONGC via KG Basin, Daman, DSF, and the BP-TSP partnership; Oil India with its gas ramp-up via pipeline expansions and NRLs scale-up. Rising NWG allocation further strengthens the outlook, particularly for Oil India, which remains under-monetized today but should benefit materially as grid connectivity and classifications evolve," Antique stated.
Antique Stock Broking reiterated a BUY rating on both ONGC and Oil India, with a revised target price of Rs 310 per share for ONGC—raising the EV/Ebitda multiple to 4x from 3.5x based on increased volume visibility—and an unchanged target of Rs 520 for Oil India.
Currently, ONGC and Oil India are among the cheapest upstream stocks worldwide, trading on estimated FY28 EV/Ebitda (adjusted for investments) at just 2.9x and 3.6x, compared to the global average of 4.2x (one year forward) and 4.0x (two year forward). On a reserves basis, ONGC and Oil India's EV/bbl (1P) stands at $6.0 and $5.4, nearly half the global average of $11.9, a discrepancy that is even starker given some global companies may not be able to fully produce their reserves due to the energy transition.
"Cash flow intensity is respectable at $29.4/ $22.6 per bbl Ebitda, broadly in line with US independents. Valuation discount used to be on account of capped APM realizations though changed with premium NWG, legacy asset maturity, and state ownership concerns. Yet, with policy reforms (APM gas price liberalisation, premium-priced NWG, windfall tax removal, new exploration areas) and visible production catalysts, the case for re-rating is clear," said Antique.
The present stock prices suggest crude oil realisations of just $54 per barrel for ONGC and $45 per barrel for Oil India, significantly lower than Antique's long-term view of $65 per barrel. Oil India's discount is partly due to the large embedded value of NRL (Rs 148 per share). The brokerage highlighted that, historically, when crude prices were above $70, the markets long-term estimate was $60–65, and stocks reflected this. Now, with spot crude near that range, current market prices imply a much lower long-term crude assumption, which Antique argues is unsustainable.
Both companies are entering a visible growth phase, supported by robust project pipelines. ONGC's immediate growth drivers include ramp-up in the KG Basin, Daman, DSF-II, and potential contributions from the BP-TSP partnership. Oil India's growth plan is anchored in a larger drilling programme, with resolution of gas transportation bottlenecks through DNPL's capacity expansion to 2.5 mmscmd by end-2025 and the IGGL grid rollout by FY27.
Oil and Natural Gas Corporation (ONGC) and Oil India have seen their share prices fall by 18% and 32% respectively over the past 12 months, resulting in valuations that suggest crude oil prices far below historical norms. According to Antique Stock Broking, these valuations do not reflect the firm crude price, which has consistently remained above $65 per barrel, buoyed by Chinese stockpiling and ongoing geopolitical concerns. Even if crude were to dip to $60 per barrel in the near term, this would still be well above the implied prices currently factored into ONGC and Oil India market prices.
Both ONGC and Oil India are trading at significant discounts to their global upstream peers, as measured by asset and cash flow metrics. This underperformance is attributed to the legacy impact of regulated pricing, such as the administered pricing mechanism (APM) for gas and previous oil price caps, in addition to the maturity of legacy fields and subdued production growth.
"We believe these concerns are not relevant any more. Importantly, both companies are now entering a growth phase: ONGC via KG Basin, Daman, DSF, and the BP-TSP partnership; Oil India with its gas ramp-up via pipeline expansions and NRLs scale-up. Rising NWG allocation further strengthens the outlook, particularly for Oil India, which remains under-monetized today but should benefit materially as grid connectivity and classifications evolve," Antique stated.
Antique Stock Broking reiterated a BUY rating on both ONGC and Oil India, with a revised target price of Rs 310 per share for ONGC—raising the EV/Ebitda multiple to 4x from 3.5x based on increased volume visibility—and an unchanged target of Rs 520 for Oil India.
Currently, ONGC and Oil India are among the cheapest upstream stocks worldwide, trading on estimated FY28 EV/Ebitda (adjusted for investments) at just 2.9x and 3.6x, compared to the global average of 4.2x (one year forward) and 4.0x (two year forward). On a reserves basis, ONGC and Oil India's EV/bbl (1P) stands at $6.0 and $5.4, nearly half the global average of $11.9, a discrepancy that is even starker given some global companies may not be able to fully produce their reserves due to the energy transition.
"Cash flow intensity is respectable at $29.4/ $22.6 per bbl Ebitda, broadly in line with US independents. Valuation discount used to be on account of capped APM realizations though changed with premium NWG, legacy asset maturity, and state ownership concerns. Yet, with policy reforms (APM gas price liberalisation, premium-priced NWG, windfall tax removal, new exploration areas) and visible production catalysts, the case for re-rating is clear," said Antique.
The present stock prices suggest crude oil realisations of just $54 per barrel for ONGC and $45 per barrel for Oil India, significantly lower than Antique's long-term view of $65 per barrel. Oil India's discount is partly due to the large embedded value of NRL (Rs 148 per share). The brokerage highlighted that, historically, when crude prices were above $70, the markets long-term estimate was $60–65, and stocks reflected this. Now, with spot crude near that range, current market prices imply a much lower long-term crude assumption, which Antique argues is unsustainable.
Both companies are entering a visible growth phase, supported by robust project pipelines. ONGC's immediate growth drivers include ramp-up in the KG Basin, Daman, DSF-II, and potential contributions from the BP-TSP partnership. Oil India's growth plan is anchored in a larger drilling programme, with resolution of gas transportation bottlenecks through DNPL's capacity expansion to 2.5 mmscmd by end-2025 and the IGGL grid rollout by FY27.