A majority of brokerages maintained their bullish bets on Oil and Natural Gas Corporation as the upstream explorer came out with a robust set of Q1 earnings numbers.ONGC on Thursday reported a 58.15 per cent jump in net profit at Rs 6,143.88 crore for three months to June on the back of higher crude prices and improved performance.It had posted a net profit of Rs 3,884.73 crore in the same quarter last year.Revenue from operations during the quarter rose to Rs 27,212.83 crore, up 42.7 per cent from Rs 19,073.54 crore last fiscal.JP Morgan retained Overweight on ONGC with a target price of Rs 265.
Net profit was impacted by lower other income and higher tax.
Debt for acquisitions has declined and should fall further.
We expect a sequential pick-up in crude production and full benefit of rupee depreciation to flow, the brokerage house said.CLSA also has a Buy on the state-owned explorer with a target price of Rs 240.
Higher-than-expected sales volumes and realisations drove revenues.
EBITDA remained above estimates while net profit came below expectations due to higher tax rates.
ONGC is now the cheapest among global largecap EP.
One can buy for attractive risk-reward, the brokerage house said.Motilal Oswal also has a Buy call on ONGC with a target price of Rs 219 while Nomura retained Neutral with a target price of Rs 185.
Nomura expects higher oil prices to drive 43 per cent EPS growth for ONGC in FY19.The stock went up 1.30 per cent to Rs 168.15 at around 10.10 am.
The BSE Sensex was up 0.69 per cent at 37,420 at around the same time.