The oil and natural gas giant has paid an equity dividend of Rs 14 per share in the last 12 months amounting to a dividend yield of 8.92% if we consider the current share price levels.

ONGC's dividend per share expected to be in double-digits till FY26. Should you buy?Reuters
State-owned ONGC is expected to pay dividend per share (DPS) in double digits at least till FY26, brokerage Ambit said, forecasting the same to be Rs 14 in FY24.

The company has never paid a dividend above Rs 10 till FY22, but declared the same at Rs 14 in FY23E.

The brokerage has initiated a “buy” rating on the company with a target price of Rs 210. On Thursday, the stock was trading below the previous day’s close at Rs 156.90 apiece on the NSE. So far this year, the shares have gained about 4.32%.

In the past 12 months, ONGC has paid an equity dividend amounting to Rs 14 per share, which results in a dividend yield of 8.92% if we consider the current share price levels.

Ambit expects the oil and natural gas giant to reverse its domestic production decline as the KG-D5 block is in the final stages of ramp-up and estimates 51.6MMTOE production in FY25.

Operationally, ONGC has one of the lowest production costs globally but that is due to output from onshore and shallow-water fields only. However, overall cash opex is higher at $23.05/BOE as against $17/BOE for peers, mainly due to production taxes.

Ambit said windfall taxes would be an added burden till FY25, and cash opex will likely increase due to rising share of deep-water volumes where production costs are high.

According to Trendlyne data, ONGC has an average target of Rs 179.75, which represents an upside of 14.49% from the current levels.

The brokerage said ONGC is currently one of the cheapest E&P stocks globally, and it expects 15% FY23-26E post tax RoCE as against just 9% between FY15 and FY22.

ONGC reported a 26% year-on-year rise in net profit for the quarter ended December to Rs 11,045 crore. Revenue from operations increased nearly 36% YoY to Rs 38,583 crore.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

Experience Your Economic Times Newspaper, The Digital Way!
Read Complete Print Edition »
  • Front Page
  • Pure Politics
  • Disruption
  • Companies & Economy
  • More


    Social media & sharing icons powered by UltimatelySocial