ONGC‘s share price was upbeat on Tuesday as brokerages maintained their bullish outlook on the stock after the oil and gas explorer’s Q1 print.

What Happened: ONGC reported a 15% decline in its standalone net profit for the first quarter ended June 2024, totalling ₹8,938 crore, compared to ₹10,527 crore in the same quarter of the previous year. However, revenue from operations increased by 4% year-on-year, reaching ₹35,266 crore, up from ₹33,814 crore in the corresponding period last year.

The numbers beat Dalal Street estimates. Analysts forecasted the PSU to post a revenue of around ₹35,068 crore, with a net profit of ₹8,078 crore. The ONGC share price is also gaining strength today as border markets made a recovery on Tuesday.

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The crude oil realization for the first quarter was $83.05 (around ₹6,889) per barrel, an increase from $76.36 (around ₹6,300) in the same quarter last year. During this period, total crude oil production fell slightly to 5.23 million metric tons, with production from joint ventures at 0.35 million metric tons. Total gas production during the quarter decreased by 4%, reaching 4.86 billion cubic meters.

Brokerage Reactions: Jefferies maintained a “buy” rating on the stock with a target price of ₹390. The Q1 standalone EBITDA was 3% ahead of estimates, the research firm noted.

Q1 domestic production was broadly in line and realisations were slightly ahead of expectations, the brokerage said. Q1 profit after tax was in line with estimates and consensus, offset by higher depreciation and amortization and interest expenses, it added.

Motilal Oswal also maintained its “buy” rating on the stock. Motilal Oswal on ONGC stated that the reported oil realization was in line with their estimate at $83.1 per barrel, marking a 9% year-on-year increase.

EBITDA also aligned with its estimate, but PAT was 9% below the brokerage’s expectation. It attributed the shortfall in profit to higher-than-expected depreciation, dry well write-offs and lower other income quarter-on-quarter.

Price Action: ONGC’s share price was up 2% to trade at ₹316.45 in early trade on Tuesday.

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