ONGC share hits record low on disappointing Q3; brokerages maintain ‘Buy’ rating


Shares of ONGC (Oil and Natural Gas Corporation) slipped over 4 per cent in intraday trade on Monday, hitting over 11-year low of Rs 98.85 on the Bombay Stock Exchange (BSE), after the oil and gas major reported disappointing earnings for the third quarter ended December 31, 2019. The stock was trading below its lowest level of Rs 89.68 touched in intraday trade on October 27, 2008.

Earlier on Friday, the state-owned oil exploration and production major reported a 49.8 per cent decline in its net profit at Rs 4,152 crore during October-December quarter of this fiscal, compared to Rs 8,263 crore in the same period of the previous fiscal, dented by falling oil and gas prices and a decline in production.

Reacting to Q3 earnings report, ONGC share price fell as much as 4.26 per cent to hit a record low of Rs 98.85 apiece on the BSE after opening tad lower at Rs 101.85 against previous close of Rs 103.25. In contrast, the BSE Sensex was trading 159 points, or 0.32 per cent, lower at 41,098.

There was also spurt in volume trade as 9.34 lakh shares changed hands over the counter as compared to two-week average volume of 5.88 lakh shares.

In a similar trend, ONGC shares were trading 3.19 per cent lower at Rs 100 on the National Stock Exchange (NSE). The scrip touched an intraday low of Rs 98.80 against previous closing price of Rs 103.30.

In Q3FY20, ONGC’s gross revenue fell 14.4 per cent year-on-year to Rs 23,710 crore versus Rs 27,694 crore in the year-ago period, amid lower oil price realisation. Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) stood at Rs 12,298.3 crore, while EBITDA margin was at 51.9 per cent during December quarter of this fiscal.

Despite weak earnings numbers, most analysts have maintained ‘BUY’ rating on ONGC stock. Analysts at SBICAP Securities have maintained ‘BUY’ on the stock, saying that production was in line of expectations despite lower-than-expected crude and gas sales volume.

Analysts at CLSA have also maintained ‘BUY’ with revised target price of Rs 180 from Rs 225 per share. Nomura also recommended ‘BUY’ rating with target price of Rs 175 per share.

By Chitranjan Kumar

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