Retain ‘promote’ on ONGC with unchanged FV of Rs 60
Consolidated web earnings was larger at Rs 68.9 billion (EPS of Rs 5.5)
ONGC’s 2QFY21 outcomes had been nicely forward of our expectations boosted by larger value-added-products gross sales volumes, larger realisations, discount in different bills and beneficial motion in below-Ebitda gadgets. We align FY2021E EPS for robust efficiency of ONGC and its subsidiaries, whereas broadly retaining FY2022-23 estimates. ‘Promote’ stays with unchanged FV of Rs 60. Potential restoration in world oil costs or deregulation of home gasoline costs are key dangers to our unfavourable stance.
ONGC’s revenues had been 4% above our estimate at Rs 169.2 billion in 2QFY21 pushed by 2% larger crude realisations and 10% larger VAP gross sales, which was partly offset by lower-than-expected oil gross sales volumes. Ebitda was 12% above our estimate at Rs 84.4 billion, aided by a wholesome discount in working bills. Adjusted standalone web earnings was sharply larger at Rs 37.7 billion (EPS of Rs 3) additional boosted by larger different earnings and decrease curiosity value, DD&A bills and tax fee.
Reported web earnings was decrease at Rs 28.8 billion together with an impairment lack of Rs 12.4 billion recognised on producing fields on factoring decrease pure gasoline value. Consolidated reported web earnings was larger at Rs 58 billion (EPS of Rs 4.6), together with web earnings of RS 24.8 billion from HPCL, Rs 6.73 billion from OVL and RS 0.36 billion from MRPL. In 1HFY21, adjusted standalone web earnings declined 66% y-o-y to Rs 42.3 billion (EPS of Rs 3.4), reflecting a pointy drop in oil and gasoline realisations and decrease manufacturing volumes. Consolidated web earnings was larger at Rs 68.9 billion (EPS of Rs 5.5), together with important web revenue of Rs 52.9 billion from HPCL, modest web earnings of Rs 3.4 billion from OVL and web lack of RS 4.6 billion from MRPL.
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