ONGC - Q1FY2014 Result Review - Angel Broking

ONGC's 1QFY2014 net profit was below our and street expectations on account of higher than expected subsidy. Its net sales decreased 4.3% yoy to Rs. 19,218cr on account of higher subsidy burden in our view. The company shared a subsidy burden of Rs. 12,622cr in 1QFY2014, compared to Rs. 12,346cr in 1QFY2013 and Rs. 12,312cr in 4QFY2013. Its EBITDA declined 23.7% yoy to Rs. 8,488cr due to lower realizations. Depreciation expense increased by 22.0% yoy to Rs. 3,901cr; hence, its net profit declined 33.9% yoy to Rs. 4,016cr (below our estimate of Rs. 5,532cr). We maintain a Buy on the stock while we keep our target price under review.

Source : Equity Bulls

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