ONGC - Lower DDA leads to +ve surprise - Emkay

Reco: Accumulate
CMP: Rs 281
Target Price: Rs 327

- ONGC reported results which were better than street estimates on account of lower DDA expenses to Rs.31.9bn, which declined by 22.4%/34.8% YoY/QoQ.

- Net realization for Q1FY13 was $46.6/bbl, decline of 4.4% YoY and up 5.1% QoQ, lower than street est. of $48-50/bbl.

- Overall production has increased marginally by 0.3% YoY to 12.96mtoe, while sales volume grew by 4.3% YoY to 11mtoe led by higher sales vol from own natural gas and JV crude oil.

- Given its improving production profile ahead and inevitable position of govt to hike fuel prices, we maintain Accumulate for ONGC with a PT of Rs327.

Source : Equity Bulls

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