11 Nov 2022 , 10:25 AM
Result date: 12th November, 2022
Recommendation: Reduce
Target price: Rs150
Oil and Natural Gas Corporation (ONGC) could witness pressure on earnings (sequentially) owing to lower crude prices and imposition of export taxes from 1st July. Crude averaged USD 98/bbl during the quarter while the APM prices were stagnant at USD 6.1/mmbtu on a sequential basis. There could be some benefit to ONGC and other upstream companies arising from deregulation of oil sales from government defined procedure to a free market one.
As compared to the year-ago quarter, strong crude realizations are likely to be restricted by windfall taxes.
ONGC’s Profit After Tax or PAT could decline both sequentially as well as over the year-ago quarter.
Important management insights to watch out for:
Rs. Million | September 2022 estimates | YoY change | QoQ change |
Profit After Tax | 91,740 | (50)% | (40)% |
Source: Company, IIFL Research
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