ONGC stock hits 52-week high on Q3 earnings: Here's what brokerages say

ONGC share hit a 52 week high today after the state energy firm reported nearly seven-fold jump in third quarter net profit as higher oil and gas prices offset a fall in production. ONGC stock rose 4.84% to a 52 week high of Rs 176.4 today.

ONGC share is trading higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages. The stock has gained 74% in a year and risen 19% since the beginning of this year.

Total 17.55 lakh shares of the firm changed hands amounting to a turnover of Rs 30.60 crore on BSE. Market cap of the firm rose to Rs 2.13 lakh crore on BSE.

The stock hit 52-week low of Rs 95.60 on February 15, 2021.

ONGC reported a rose 596.7 per cent in net profit to Rs 8,764 crore in Q3 against Rs 1,258 crore profit in the same period.

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The nation's top oil and gas producer got $75.73 for every barrel of crude oil it produced and sold in the third quarter of the current fiscal year as compared to $43.20 a barrel realisation in the same period of 2020-21.

The board of the firm cleared a second interim dividend of 35 per cent ( Rs 1.75 per share). "The total payout on this account will be Rs 2,201.55 crore."

YES Securities in a note said , "ONGC's 3QFY22 operating profit stood at Rs 14,850 crore (plus 128% YoY; +19% QoQ), stood slightly below our and street estimates, on higher than anticipated operating expenses. The PAT at Rs 8,770 crore (plus 536% YoY; minus 52% QoQ), nevertheless stood above our and street estimates on higher other income.

We believe that recent rally (81.2% in 12 months and 14% in 3 months) in ONGC's stock prices is largely fueled by high crude oil and natural gas prices, even as its production is on decline and capital expenditure on the rise to sustain the falling production.

We continue to believe that normalisation of supplies, in the near term and a push for sustainable renewable energy, in the longer run would act as dampener for crude oil prices. Maintain REDUCE, with a target price (TP) of Rs 150/share."

JM Financial Institutional Securities said, "Profit after tax at Rs 8,800 crore was also in line with JMFe (but higher than consensus of Rs 8,140 crore). We reiterate BUY (with an unchanged target of Rs 230/share) as ONGC is a key beneficiary of higher crude prices; every $1/bbl rise in crude price results in our valuation rising by 2%.

Further, ONGC is also a major beneficiary of the potential sharp jump in domestic gas price in FY23 given the spike in global gas prices. At CMP, ONGC trades at 4.7x FY23E EPS and 0.8x FY23E BV (3-year avg. of 0.6x)."