Should you buy, sell or hold ONGC stock after Q1 earnings? Here's what brokerages say

Analysts in a CNBC-TV18 poll had predicted a profit of Rs 4,565 crore for the quarter.

More than doubling of oil prices compensated for a fall in production for the company during the quarter.

The firm got $65.59 for every barrel of crude oil it produced and sold in the first quarter of the 2021-22 financial year, as against $28.87 per barrel in the year-ago period. Gas price was lower by a quarter at $1.79 per million British thermal unit.

Here's what brokerages said on ONGC after the earnings announcement:

The company reported a strong set of Q1 earnings, and its performance is likely to improve further from H2 as higher gas prices flow through, said the brokerage. Gas prices are likely to be reset sharply higher in October and March, said JPMorgan, which maintained an 'overweight' rating on the stock with a target price of Rs 190.

The brokerage said it expects oil price realisation to increase to around $59 per barrel in FY22E and $61/bbl in FY23E, from $44/bbl in FY21, given the expected global economic rebound after the pandemic. The company's Q1 revenue was 2 percent below estimate owing to a lower-than-expected crude oil price realisation of $67.1/bbl as against the estimated $68.7/bbl, HDFC Securities said. The brokerage has a 'buy' call on ONGC with a target price of Rs 143.

The brokerage has maintained an 'add' rating on the stock with a raised target price of Rs 145. ONGC's Q1 earnings stood in‐line with Yes Securities' estimates. A sequential improvement in crude oil prices helped the company shore up its earnings, even as crude oil production stood lower by 3 percent sequentially and 5 percent annually, the brokerage said. The natural gas business, on the other hand, continued to experience weaker realisation, acting as a drag on earnings, according to Yes Securities. The natural gas realisation is expected to improve by 50‐60 percent from October and further improvement is expected in April 2022, it added.