ONGC Q3 Review - Valuations Attractive, Divestment Concerns Remain An Overhang: Prabhudas Lilladher
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Prabhudas Lilladher Report
We increase our earnings estimates of Oil and Natural Gas Corporation Ltd. for FY21E to factor rise in global crude oil prices given production cuts by OPEC countries and similarly for FY22/23 to factor in lower cost.
Global crude oil and gas prices will likely remain weak given uncertain demand environment plus new supplies may come in March 2021 when production cuts get reviewed; accordingly, we factor in $45/55/barrel of oil for FY21/22E.
The company’s stock has underperformed broader index due to concerns on divestment of Government of India share and inefficient capital allocation policies.
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