Retain ‘promote’ on ONGC with unchanged FV of Rs 60


Consolidated web earnings was increased at Rs 68.9 billion (EPS of Rs 5.5)

ONGC’s 2QFY21 outcomes have been nicely forward of our expectations boosted by increased value-added-products gross sales volumes, increased realisations, discount in different bills and beneficial motion in below-Ebitda gadgets. We align FY2021E EPS for robust efficiency of ONGC and its subsidiaries, whereas broadly retaining FY2022-23 estimates. ‘Promote’ stays with unchanged FV of Rs 60. Potential restoration in international oil costs or deregulation of home gasoline costs are key dangers to our detrimental stance.

ONGC’s revenues have been 4% above our estimate at Rs 169.2 billion in 2QFY21 pushed by 2% increased crude realisations and 10% increased VAP gross sales, which was partly offset by lower-than-expected oil gross sales volumes. Ebitda was 12% above our estimate at Rs 84.4 billion, aided by a wholesome discount in working bills. Adjusted standalone web earnings was sharply increased at Rs 37.7 billion (EPS of Rs 3) additional boosted by increased different earnings and decrease curiosity price, DD&A bills and tax price.

Reported web earnings was decrease at Rs 28.8 billion together with an impairment lack of Rs 12.4 billion recognised on producing fields on factoring decrease pure gasoline worth. Consolidated reported web earnings was increased at Rs 58 billion (EPS of Rs 4.6), together with web earnings of RS 24.8 billion from HPCL, Rs 6.73 billion from OVL and RS 0.36 billion from MRPL. In 1HFY21, adjusted standalone web earnings declined 66% y-o-y to Rs 42.3 billion (EPS of Rs 3.4), reflecting a pointy drop in oil and gasoline realisations and decrease manufacturing volumes. Consolidated web earnings was increased at Rs 68.9 billion (EPS of Rs 5.5), together with important web revenue of Rs 52.9 billion from HPCL, modest web earnings of Rs 3.4 billion from OVL and web lack of RS 4.6 billion from MRPL.

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