ONGC - Maintain Buy on the back of Reforms - Emkay

- ONGC reported results which were below street and our estimates at PAT level, on the back of higher dry well expenses and one-off provision of Rs.18.5 bn for superannuation

- Net realization stood at $50.9/bbl, grew by 6%/14.7% QoQ/YoY. Out of the total under recovery of Rs.370bn, upstream share stood at 40%, and within upstream ONGC share stood at 82% to Rs.123bn

- Overall production decline by 3.6%/1.8% YoY/QoQ to 12.2mtoe, while sales volume decline by 3.5%/2.7% YoY/QoQ to 10.7mtoe

- Lowered our estimates and TP as govt. may not share any benefit with the upstream companies arising out of decline in under-recoveries for FY14, we believe benefit to flow from FY15. Maintain Buy with revised TP to Rs.411 (from Rs.440).

Source : Equity Bulls

Keywords