ONGC - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 3.9

Oil & Natural Gas Corporation Ltd. (ONGC) offers an attractively priced stock backed by stable earnings, solid dividends, and strong asset base. However, cyclical pressures and earnings contraction temper its near-term outlook.

⚙️ Core Financials Breakdown

ROE: 10.7% and ROCE: 12.4% — modest efficiency typical for energy majors; stable but not explosive.

EPS: ₹28.8 — reflects strong profitability; supported by core operations.

PAT Qtr Decline: ₹8,622 Cr. → ₹7,406 Cr. — down 34%, impacted by softer oil/gas prices or higher costs.

Debt-to-equity: 0.55 — moderate leverage; manageable under current cash flow strength.

Dividend Yield: 5.07% — excellent for income investors; consistent payout history.

📊 Valuation Metrics

Metric Value Commentary

P/E Ratio 8.36 Deep value vs. industry PE of 11.6 — pricing reflects risk and cyclicality

P/B Ratio ~0.88 Trading below book value — attractive from asset standpoint

PEG Ratio -1.03 Not meaningful due to earnings contraction

Intrinsic Value Estimated ₹265–₹285 Currently undervalued, though upside tied to commodity prices

🛢️ Business Model & Strategic Edge

India’s largest oil and gas producer — upstream assets across crude oil, natural gas exploration, and production.

Strategic infrastructure & government backing provide long-term stability.

Sensitive to global crude and gas pricing, which drives margins and sentiment.

Competitive moat in domestic energy leadership, but challenged by subsidies, geopolitical risks, and ESG trends.

📉 Technical Sentiment

RSI: 44.7 — neutral zone, no clear momentum.

MACD: -0.66 — slight bearish crossover, trend softening.

Price below DMA 200 and DMA 50 — reflects technical weakness.

Volume in line with average — steady participation but no strong buying signal.

🎯 Entry Zone & Investment Guidance

Suggested Entry Zone: ₹225–₹235 — good accumulation range for dividend-seeking or contrarian investors.

Long-Term Holding View

Ideal for yield-focused portfolios or those betting on an oil cycle upturn.

Monitor crude price trends, subsidy policies, and exploration efficiency.

Long-term tailwinds include India’s energy demand growth and infrastructure push.

Want a side-by-side on ONGC vs. Oil India or GAIL to assess which energy stock offers the best mix of growth, dividends, and valuation comfort? I’d be happy to chart that out for you. 🛢️📈⚡️

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