Higher output, reasonable valuations positive for upstream major ONGC

The upside in production volumes coupled to reasonable valuations are two reasons why most analysts are bullish on the stock

Upstream majors ONGC and Oil India (OIL) results for the January-March quarter (Q4) of FY24 suggest better production in future. But OIL missed its own production targets although it delivered higher volumes and it disappointed the market in terms of Ebitda.

ONGC reported standalone Ebitda of Rs 17,400 crore (up 7 per cent year-on-year or Y-o-Y) in Q4FY24, slightly below estimates due to other higher expenses. This was due to one-off charges of Rs 900 crore for tax-related matters. The Q4FY24 PAT was 13 per cent higher, due to lower depreciation and less expense for dry well write-offs.

The management