Now Reading: CLSA, Elara diverge on ONGC target as production concerns mount
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CLSA, Elara diverge on ONGC target as production concerns mount
CLSA, Elara diverge on ONGC target as production concerns mount
The Story in Brief
Brokerage firms CLSA and Elara Capital have issued contrasting buy ratings on Oil and Natural Gas Corporation (ONGC) after its Q2FY27 results, with price targets implying very different upside potential. CNBCTV18 reports that CLSA maintained a ‘High Conviction Outperform’ rating with a ₹405 price target, seeing 72% upside based on Brent crude averaging $82 per barrel in FY28. Livemint reports that Elara Capital set a ₹320 target, seeing 38% upside, and flagging risks including crude falling below $70 per barrel and reservoir issues at the KG-98/2 block.
ONGC reported a 9.1% sequential decline in standalone net profit to ₹15,489 crore for the September 2026 quarter, marginally below estimates. Revenue fell 5.6% quarter-on-quarter to ₹43,875 crore. Both brokerages noted production challenges: crude output dropped 5.3% year-on-year and natural gas production fell 2.3%, attributed to reservoir problems at KG-98/2 and monsoon delays. CLSA expects production growth from the KG-98/2 ramp-up, the Daman Upside project, and the BP service contract in the Mumbai High field. Elara said these issues are execution-related rather than structural.
Indian Opinion Analysis
CLSA and Elara Capital both rate ONGC a buy, but their price targets differ sharply, ₹405 (72% upside) versus ₹320 (38% upside), reflecting divergent assumptions about crude prices and production growth. CNBCTV18 foregrounds CLSA’s bull case, stressing that the stock is pricing in only $55/bbl Brent against CLSA’s $82/bbl estimate. Livemint emphasises Elara’s more cautious view, spelling out risks including crude falling below $70/bbl and reservoir issues at KG-98/2. Both brokerages cite the same production headwinds, output fell in the September quarter, but frame them differently: CLSA points to early gains from the BP service contract, while Elara calls the decline execution-related rather than structural. The key difference is the implied crude price scenario each uses: CLSA’s $82/bbl versus Elara’s risk threshold of $70/bbl. The two brokers agree that production growth from KG-98/2 and other projects is the next catalyst to watch.
Coverage: 2 sources, 2 neutral
Sources (2): cnbctv18.com (neutral report), livemint.com (neutral report)
This brief was synthesised by AI from the 2 sources linked above, so one read covers every framing they carry. Methodology and corrections.
Update, 9 November 2026: this story now draws on 2 sources.
