Buy Oil And Natural Gas Corporation Ltd., target Rs 280.0 : JM Financial

JM Financial has Buy call on Oil And Natural Gas Corporation Ltd. with a target price of Rs 280.0. The current market price of Oil And Natural Gas Corporation Ltd. is 251.2. Time period given by analyst is year, when Oil And Natural Gas Corporation Ltd. price can reach defined target. ONGC’s 1QFY17 EBIDTA of Rs93.9bn (+50% QoQ, -23% YoY) was lower than JMFe (Rs104.8bn) on account of lower production volumes (Crude vol was 4.88mmt vs. JMFe of 5.10mmt; gas was 3.90bcm vs. JMFe of 4.99bcm). In the conference call, ONGC management stated that they have improved the oil collection efficiency which will result into improved sales / production volume ratio. JM Financial Research therefore, tweaked its production estimates and also make changes in cess and opex.