Shares of Oil & Natural Gas of Corp. came out of a three-day losing streak and recorded their best intraday jump since June 3, after brokerages raised their target prices on account of a strong outlook and high value of listed investment.
The company's net profit declined 11.19% to Rs 10,235.64 crore in the first quarter of fiscal 2025, according to an exchange filing on Monday. The stock erased all intraday gains of nearly 4% and closed 1.34% lower as the overall markets fell.
The decline in production from matured fields will be compensated in upcoming quarters, the company said in a post earnings call on Wednesday.
It has guided for 10GW green energy by 2030 with total investment of Rs 1 lakh crore and FY25 capex of Rs 30,000-33,000 crore.
At 12:24 p.m., the stock contributed second highest or 19.98 points to the 277.55 points jump in the Nifty 50.
Emkay Research retained a 'buy' rating on the stock on improving production outlook and reasonable valuations. It raised the target price to Rs 320 per share, implying a 4.54% upside, on roll-over and higher value of listed investments.
ICICI Securities Ltd. has also maintained a 'buy' rating on the stock and increased the target price to Rs 375 from Rs 340, implying 23% upside.
But it has cut its estimates by 5.3/3.3/4.5% over FY25/26/27 to factor in weaker Q1 FY25 performance for subsidiaries Hindustan Petroleum Corp. and Mangalore Refinery and Petrochemicals along with a slight delay in KG 98/2 basin production.
However, the target price upgrade was driven by a stronger cashflow and production outlook, meatier subsidiary earnings over the next two–three years and higher investment value of listed investments, it said.
Downside risks to the brokerages' call include a sharp reversal in oil and gas price trends, slower-than-expected ramp up of production from KG basin, and any unexpected regulatory setbacks.
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Shares of the company rose as much as 7.69%, the highest level since Aug. 2, before paring some gains to trade 7.4% higher at Rs 328.80 apiece, as of 12:19 p.m. This compares to a 1.06% advance in the NSE Nifty 50.
The stock has risen 60.42% year-to-date and 88.89% in the last 12 months. Total traded volume so far in the day stood at 1.39 times its 30-day average. The relative strength index was at 58.
Out of 28 analysts tracking the company, 18 maintain a 'buy' rating, five recommend a 'hold' and five suggest 'sell', according to Bloomberg data. The average 12-month analysts' consensus price target implies an upside of 0.4%.
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