IIFL Securities's Stock Pick Today: Buy Oil And Natural Gas Corp. with Target Rs 298

IIFL Securities has issued a buy recommendation for Oil and Natural Gas Corporation (ONGC) with a target price of Rs 298. The current market price of ONGC is Rs 286.85. This call is based on the company's strong financial position, its dominant market share in the Indian oil and gas sector, and its plans to increase production and exploration activities.

About Oil And Natural Gas Corp.:

Oil and Natural Gas Corporation Limited (ONGC), incorporated in 1956, is India's largest oil and gas exploration and production company. It operates in 26 basins across 16 countries. ONGC is responsible for around 70% of India's crude oil and 61% of its natural gas production. The company has a large reserve base of over 12 billion barrels of crude oil and equivalent natural gas. ONGC's operations include exploration, development, and production of crude oil and natural gas, refining, marketing, and transportation of crude oil and natural gas, and petrochemicals production.

52 Week Price Trend:

ONGC, India's leading oil and gas company, has shown resilience amidst market fluctuations. Despite a 52-week high of Rs 281.15, its current market price (CMP) of Rs 286.85 reflects a modest gain. However, ONGC's 52-week low of Rs 146.5 demonstrates its ability to navigate market challenges. This stability during a period of global energy market uncertainty highlights ONGC's strong financial position and operational efficiency, making it a potentially attractive investment for investors seeking stable returns.

Stratzy's MOST Analysis:

Stratzy's MOST framework assesses ONGC's management, outlook, safety, and trend to assign a BBB rating. This indicates a Medium Fundamental Risk. The rating breaks down as follows: Management (B), Outlook (BB), Safety (BB), and Trend (BBB). The overall score of BBB suggests that while ONGC faces some risks, its fundamentals are generally sound. The higher ratings in Outlook and Trend indicate potential for improvement, while the lower ratings in Management and Safety highlight areas that require attention.

Company's Fundamentals:

ONGC, listed on the National Stock Exchange (NSE) as "ONGC", exhibits a current stock valuation of Price-to-Earnings (PE) ratio of 7.4. This implies that investors are paying INR 7.4 for every rupee of the company's annual earnings. Additionally, the Price-to-Book (PB) ratio of 1.1 indicates that the market value of ONGC's shares is currently 1.1 times the value of its assets. Notably, ONGC offers a dividend yield of 4.17%, which represents the annual dividend income as a percentage of the current share price, providing shareholders with a potential income stream.

Fundamental and Technical information provided in this blog were last updated on 16 Apr, 2024

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