ONGC Q3 Results Review - Write-Offs Lead To Lower Than Expected Performance: Motilal Oswal
Ebitda slightly below; net realisation at $ 72/bbl.
NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
Oil and Natural Gas Corporation Ltd. reported Ebitda stood at Rs 171.6 billion (-16% YoY), 4% below our estimate, mainly due to higher-than-expected exploratory well write-offs in Q3 FY24. profit after tax was 4% higher than our estimate, mainly aided by higher other income and a lower-than-expected tax rate.
The management has guided for a 5% compound annual growth rate in overall production over the next three years, mainly driven by KG 98/2 and Daman upside development. Gas production from the KG 98/2 asset, which will begin in Q3 FY25, is expected to ramp up to 10 million metric standard cubic meter per day in FY25.
The management remains confident that ONGC will command a 20% higher gas price for new wells and that in three years, ~20% of gas production could command such higher pricing.
We decrease our standalone FY24 Ebitda/earning per share estimates by 6%/7% and consolidated FY24 EPS estimate by 8% due to a weaker-than-expected performance in ONGC Videsh Ltd. during nine months FY24.
We value the standalone business at 6 times December- 25E adjusted EPS of Rs 34.2 and 'Add' the value of investments to arrive at our target price of Rs 315, implying 22% potential upside. We reiterate our 'Buy' rating on the stock.
Click on the attachment to read the full report:
This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.