Production growth after more than a decade key for ONGC's outperformance, say analysts

The new gas fields, according to ONGC, will attract a 20% premium over the APM prices. Around 6% to 8% of ONGC's gas production every year comes from new wells.

Brokerage firm Motilal Oswal reiterated its buy recommendation on the stock with a price target of ₹235, which implies a potential upside of up to 18% over the next 12 months.

Another firm with a bullish stance on the stock is Morgan Stanley, who is overweight on the stock with a price target of ₹216, which implies a potential upside of 9% from current levels.

Morgan Stanley mentioned that production growth after more than a decade of decline is key for ONGC's next leg of outperformance.

ONGC reported a 2% quarter-on-quarter rise in its standalone net profit to ₹10,216 crore for the July-September quarter as against ₹10,015 in the June quarter. The profit, however, was lower than a CNBC-TV18 poll estimate of ₹11,034 crore.

ONGC's margins declined 530 basis points sequentially to 52.2% in the September quarter from 57.5% in the June quarter.

Shares of ONGC are trading a percent higher on Thursday at ₹201.60. The stock is now up 34% so far in 2023.