The brokerage values ONGC's standalone business and OVL at 6x Mar-26E EPS at Rs 190 and investments at Rs 55, leading to a target price of Rs 245. The stock is currently trading at 6.9x Mar-26E EPS.
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HDFC Securities Institutional Equities
ONGC - Awaiting gas production ramp-up
We maintain our Reduce rating on Oil and Natural Gas Corporation Ltd., with a revised target price of Rs 245, given:
limited upside potential for ONGC's crude price realisation in the current environment,
gas price realisation unlikely to change significantly in the near term, and
slower ramp-up in oil and gas production.
In Q3 FY25, reported Ebitda at Rs ~190 billion (+11% YoY, +4% QoQ) and PAT at Rs 82 billion (-17% YoY, -31% QoQ) were in line with our estimate.
Aarti Industries - Positive momentum in the energy segment
We maintain our Add recommendation on Aarti Industries Ltd., with a target price of Rs 526/share. Revenue and Ebitda are expected to increase 13/24% over FY25-28E. Profitability will be driven by-
commissioning of projects worth Rs 23-25 billion over next 15 months,
cost optimization measures undertaken, and
volume growth across products.
With an EPS CAGR of 58% and RoE improvement of 985bps over FY25-28E, the current valuation supports the company's growth potential. Ebitda/adjusted profit after tax were 5/9% above our estimates, due to higher-than-expected revenue and raw material cost.
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