Now Reading: Motilal Oswal bullish on ONGC, sees upside in gas
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Motilal Oswal bullish on ONGC, sees upside in gas
Motilal Oswal has maintained a bullish stance on Oil and Natural Gas Corporation, citing attractive risk-reward. The brokerage expects ONGC's gas price realisation to continue rising, unlike Oil India, as 7-8% of its volumes annually qualify for higher new-well gas prices.
The positive outlook comes as ONGC benefits from a unique volume mix where a portion of its gas production fetches premium pricing. This structural advantage could support earnings growth even as broader gas price ceilings fluctuate.
Motilal Oswal's analysis suggests ONGC's risk-reward profile remains favourable for investors, driven by this sustained price uptick from new wells. The brokerage did not specify a target price or timeline for the expected gains.
Indian Opinion Analysis
Motilal Oswal's distinction between ONGC and Oil India hinges on a regulatory nuance: only gas from new wells or areas is decontrolled, while legacy output faces administered pricing. ONGC's newer fields give it a pipeline of higher-revenue volumes, insulating it from price caps that pressure Oil India. The real test will be whether ONGC can sustain this advantage as its own fields age and new-well incentives taper. Investors should watch the next government-administered price revision, due in April, which could reset the baseline for comparison.
Source: ndtvprofit.com
This story was synthesised by AI from the source linked above. Methodology and corrections.
