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Prabhudas Lilladher
Target: ₹180
CMP: ₹151.40
ONGC Ltd’s standalone EBIDTA/PAT for FY22 was at ₹59,940 crore (up 83 per cent YoY) and ₹40,300 crore (up 308 per cent YoY) in line with estimates. Consolidated EBIDTA/PAT was at ₹85,770 crore (up 52 per cent YoY) and ₹49,200 crore (up 88 per cent YoY).
For Q4, operational profitability was supported by higher crude price realisation of $94.9/bbl (Q3 - $75.7/bbl), as global demand recovered. Q4 blended gas realisation was at $3.49/mmbtu (flat QoQ on Net Calorific Value basis).
For FY22, oil realisation was at $76.6/bbl vs $42.8/bbl in FY21. However, ONGC’s Q4 crude oil production came to 5.39 MMT (down 1 per cent QoQ), while gas volumes were at 5.34 bcm (down 4 per cent QoQ). Crude oil sales were at 5.14 mtpa (up 2 per cent QoQ) and gas sales were at 4.09 bcm (up 1.7 per cent QoQ). For FY22, crude oil production was at 21.7 mtpa (22.5 mtpa in FY21), while gas production was at 21.7 bcm (22.8 bcm).
ONGC remains on a strong footing, as commodity prices stay at elevated levels. We increase our FY23/24 earnings by 11 per cent/3 per cent as we increase our crude oil realisation by $5/bbl to $85/75/bbl, but also factor in higher cost. However, rising fuel marketing losses is a cause of concern, as the company might be forced to share some losses.
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