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ONGC shares up ahead of Q1 results

KR Choksey Shares and Securities believes ONGC is likely to report healthy performance.|
Aug 13, 2019, 10.23 AM IST
Shares of Oil and Natural Gas Corporation (ONGC) were trading higher in the morning trade on Tuesday ahead of its financial results for the quarter ended June 30.

The scrip was trading 0.92 per cent up at Rs 131.60 at around 10.15 am (IST), while the benchmark BSE Sensex was down 195 points, or 0.52 per cent, at 37,387 around the same time.

KR Choksey Shares and Securities believes that ONGC is likely to report healthy performance owing to rise in crude prices on a sequential basis coupled with rising gas production. However, declining gas production can be a slight negative. Average realisation is estimated at $67 per barrel for the quarter.

The brokerage house sees 5.20 per cent YoY and 59.80 per cent QoQ rise in net profit of ONGC in June quarter. However, an assessment by KR Choksey showed that sales and EBITDA may increase by 0.80 per cent and 1.70 per cent YoY, respectively, and 2.50 per cent and 58.10 per cent QoQ, respectively.

On the other hand, Kotak Institutional Equities sees 10.90 per cent YoY and 21.70 per cent QoQ rise in net profit during the quarter. It sees 6 per cent YoY and 9.50 per cent QoQ rise in net sales in June quarter.

“We expect 18 per cent QoQ rise in ONGC’s EBITDA led by higher crude realisation at $69 per barrel and increase in domestic gas price to $4.1 per million BTU.
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