Brokerages turn bullish on ONGC, here's why

ONGC share rose over 3 per cent to hit a 52-week high of Rs 126.70 on BSE today. The stock is among the top gainers on the benchmark indices.

The share has delivered 47 per cent returns in the last 12 months and risen 34 per cent since the beginning of this year.

The stock opened 1.34 per cent higher at Rs 124.30 against the previous close of Rs 122.65 on BSE. Market cap of the firm rose to Rs 1,56,813.18 crore.

The share stands higher than 5 day, 10 day, 20 day, 50 day, 100 day, and 200-day moving averages.

JP Morgan believes risk-reward is attractive and the stock is positioned similarly to metals last year.

The foreign brokerage house has maintained a 'Buy' call on the stock with a target price of Rs 190 per share.

The brokerage noted that the complete pass-through of $70 per barrel, discount to brent should narrow.

Oil prices dropped on Friday as concerns about the patchy roll-out of anti-coronavirus vaccinations around the globe tempered optimism earlier in the week that demand for fuels was recovering from the depths of the pandemic.

Brent crude was down 29 cents, or 0.4%, at $71.02 a barrel by 0057 GMT, after falling 4 cents on Thursday following a gain to the highest since May 2019. The contract is on track for a gain of nearly 2% this week.

The company reported a consolidated total income of Rs 1,02,416.51 crore for the quarter ended December 2020, down 7.89 per cent. Total income in the year-ago period stood at Rs 1,11,187.83 crore.

Recently, cyclone Tauktae hit the Arabian Sea off the coast of Mumbai in the early hours of May 17, 2021, where ONGC's major production installations and drilling rigs are located.

"Due to the severe cyclonic storm, unfortunate incidences have occurred involving three construction barges of M/s Afcons working on a project of ONGC in Western Offshore fields in the Arabian Sea and one drilling rig of ONGC deployed for exploration purpose," the company said.

At 11:27 hours, ONGC share was quoting at Rs 124.30, up 1.35 per cent on the BSE.