Friday, June 25, 2021

Oil & Natural Gas Corpn Ltd (500312) – Raising production, reviving existing fields & Rising global oil and gas prices will be add-on in PAT

Oil & Natural Gas Corpn Ltd (500312)  closes   at 120.90 with  a  Fall   of   -0.90%   on    25-June-2021  with formation of  a  Long Red  Candle    on Daily  Price Chart.

About the Company : ONGC is the largest crude oil and natural gas Company in India, contributing around 71 per cent to Indian domestic production

Financials : Oil & Natural Gas Corpn Ltd  has posted Net Sales / Revenue   of 360572.00 Cr & Net Profit of  16249.00 Cr in FY2021 and expected to post Net Sales / Revenue   of 414660.00Cr & Net Profit of 27684.60 Cr in FY2022 & Net Sales / Revenue   of 448621.90 Cr & Net Profit of 25709.00 Cr in FY2023.

EPS will be improved from 12.92 in FY2021 to 22.0 in FY2022 & 20.40 in FY2023, reduction of debt from 98335.70Cr to 90926.40Cr with increase in Free Cash Flow from 1130.80 Cr to 14492.00 during the same period. Book Value Per Share will increase from 172 to 198 in FY2023 & RoE will increase from 6.07 to 10.7 by FY2023.

Valuations  : The Company is now Trading at X 0.60   of its  valuations of its FY2021 earnings with ~40% Discount and X0.33 of its FY2022 earnings with ~67% Discount & X0.65 of its FY2023 earnings with ~65%  Discount.

Margin of Safety (1Yr Bond Yield: Value>1 ) is now  2.8   which  makes is attractive at currenct price. The  Equity Value Per Share ( Enterprise Value Method ) is  120.90

If We factor its FY2023 earnings/valuations, its Price arrives at 204.34 (Conservative approach applied).

Market Sentiment   Update : Our Nifty Next Indictor (NNI) is now at 120.04 as on 25-June-2021, which suggests the Return on Equity Investment will be 8.4% in next 6Month; 1.7% in 12M & -5.0% (Negative) in 24M( Based on Historical data).

Disclaimer : We are / may going to take exposure shortly.

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