ONGC Shares Hit 52-Week High As Gas Prices Hiked

Shares of Oil and Natural Gas Corp. advanced on Friday and hit a 52-week high after the central government raised the price of domestic natural gas.

The central government raised the price of domestic natural gas on Thursday to $8.60 per million metric British thermal units for September, from $7.85 per mmBtu in August. The gas produced from the nomination fields of ONGC and Oil India Ltd. will have a ceiling of $6.50/mmBtu, according to a notification by the Petroleum Planning and Analysis Cell.

Shares of the company rose as much as 6.09% before paring some gains to trade 5.89% higher at 11:08 a.m. This compares to a 0.47% advance in the Nifty 50. The stock has rallied 24.91% year-to-date

The total traded quantity so far in the day stood at 4.7 times the 30-day average volume. The stock's relative strength index stands at 68.30, indicating that it is neither overbought, nor oversold.

Of the 28 analysts tracking the stock, 21 maintain a 'buy', three recommend a 'hold', and four suggest a 'sell', according to Bloomberg data. The average of 12-month analyst price estimates suggests a 3.7% upside.

Fitch On ONGC

Fitch Ratings has retained its BBB rating with a stable outlook on ONGC's standalone credit profile. The rating reflects ONGC's scale as India's largest oil and gas producer, its significant reserves and production, and its geographically diversified business model, all of which are comparable to peers, Fitch said.

The agency sees ONGC's position, ownership, and control by the government are "strong" as a result of the state's majority ownership and board appointments. It also expects the government to provide assistance to ONGC if necessary because of its relevance to India's energy security.

Fitch forecasts that ONGC's consolidated capex will climb to Rs 60,300 crore by FY27, up from Rs 49,000 crore in FY23, as core expenditure stays strong and green energy investments expand.