ONGC extends gain on interim dividend plan

The stock was trading 2% higher at Rs 191, extending its Tuesday's 1.1% gain on the BSE, after the company announced that its board will meet on February 27 to consider the second interim dividend.

Oil and Natural Gas Corporation (ONGC) was trading 2% higher at Rs 191, extending its Tuesday’s 1.1% gain on the BSE, after the company announced that its board will meet next week to consider the second interim dividend. At 02:10 pm; the S&P BSE Sensex was trading 0.36% higher at 33,824, up 0.15% in past two trading session.

ONGC on Monday after market hours said, a meeting of the board of directors of the Company is scheduled to be held on February 27, 2018, to consider, the declaration of 'Second Interim' Dividend, if any.

The record date for determining eligibility of shareholders for payment of 'Second Interim' Dividend, if any, has been fixed on Thursday, the 8th March, 2018, it added.

The stock had underperformed the market by falling 13% from its 52-week high of Rs 213 on January 25, 2018 to Rs 185 on February 19.

Earlier, the board at their meeting held on February 9, deferred the decision on second interim dividend.

Analyst at HDFC Securities maintains ‘buy’ rating on the stock with target price of Rs 290.

“Currently, ONGC is benefitting from higher oil and gas prices, and increasing gas volumes from nominated fields. There will be further increase in gas volumes from S1/Vashishta, C-26 in FY19 and KG 98/2 in FY20 which should accrue higher gas prices being produce from deep water fields. Gas prices are expected to increase. Strong shale oil supplies from USA will provide a cap on crude prices,” the brokerage firm said in results review.

However, the supply cut by OPEC and non-OPEC countries (excluding USA), will provide strength to crude prices. With no subsidy sharing with OMCs, ONGC remains a play on crude oil prices. Higher oil and gas realisations and increasing domestic gas volumes will drive profitability for ONGC, added report.