Indian Stock Market Tips- ONGC gains 4% on strong Q2 numbers; IDFC Securities raises the target to Rs 265
Revenue from operations grew by 2.9 percent during the quarter to Rs 27,989.1 crore compared to Rs 27,212.8 crore.
Shares of Oil and Natural Gas Corporation (ONGC) gained more than 4 percent in the early trade on Monday after the company reported strong numbers for the quarter ended September 2018.
The company has reported a healthy 34.5 percent sequential growth in second-quarter profit to Rs 8,264.6 crore against profit in the previous quarter stood at Rs 6,143.8 crore.
Revenue from operations grew by 2.9 percent during the quarter to Rs 27,989.1 crore compared to Rs 27,212.8 crore.
At operating level, EBITDA (earnings before interest, tax, depreciation, and amortization) increased 7.2 percent sequentially to Rs 15,788.74 crore and margin expanded 226 bps to 56.4 percent in the quarter ended September 2018.
JPMorgan has maintained overweight call on ONGC with a target of Rs 265. It sees a potential upside of 68 percent.
According to research house, a strong quarter was driven by sharply higher realizations, while rupee weakness, recent gas price hike should aid earnings further.
The stock is pricing in large subsidy burden. There is a no dividend as company likely considering buyback, it added
IDFC Securities has maintained outperformer rating on ONGC and raised target price to Rs 265 from Rs 255.
This is another strong quarter, but oil output a miss, while this is the highest profit in the last 4 years, said IDFC Securities.
The market is overcompensating for near-term uncertainty.
It expects subsidy contribution of USD 6/bbl for FY19/20 but still expect EPS CAGR of 28% over FY18-20.
Oil and Natural Gas Corporation was quoting at Rs 160.90, up Rs 3.55, or 2.26 percent on the BSE.
A Special Offer for a Special Diwali! Get 20 % off Monthly and Quarterly Or 40 % off half-yearly or yearly Services. Click here or watch More Offers- Indian Share Market Tips
0 comments