ONGC Shares Surge 5% as Jefferies Retains Bullish Outlook
Oil and Natural Gas Corporation (ONGC) saw a significant jump in its share price on Tuesday, June 11, as global brokerage firm Jefferies maintained its bullish stance on the stock. ONGC’s shares surged almost 5 percent to ₹271.10 apiece in intra-day trading following Jefferies’ positive outlook.
The brokerage highlighted that the central government’s policy continuity is expected to keep ONGC’s profitability elevated, leading to a favorable investment opportunity for shareholders. Despite a 17 percent drop in the stock price after the election verdict on June 4, Jefferies believes that the correction was excessive and presents an attractive entry point for investors.
Jefferies has set a target price of ₹390 for ONGC, indicating a potential upside of 50.5 percent from its previous close. The firm also pointed out that ONGC’s valuation is currently trading at a significant discount to the Nifty compared to its long-term average.
Looking ahead, Jefferies identified ONGC’s ramp-up in KG basin production in Q3FY25 and its impact on profitability as key triggers to monitor. The stock has already delivered strong returns, rallying 68 percent in the last year and over 26 percent year-to-date in 2024.
In FY24, ONGC reported its highest-ever standalone net profit of ₹40,526 crore and a consolidated net profit of ₹57,101 crore. The company’s crude oil production also saw a quarterly increase of 2.4 percent in Q4 FY24.
Following its earnings announcement, Nomura upgraded ONGC’s stock from ‘Reduce’ to ‘Buy’ and raised its price target to ₹290 from ₹140. The firm expects ONGC to benefit from favorable cess and royalty structures, exemption from windfall taxes, and an increasing share of gas volumes in the coming years.
Investors are advised to consult with certified experts before making any investment decisions based on the views and recommendations provided by individual analysts or broking companies.
