ONGC - Investment Analysis

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

Investment Rating: 3.8

🛢️ Fundamental Analysis: Oil and Natural Gas Corporation (ONGC)

ONGC is a government-owned energy major with strong cash flows, attractive dividends, and a deep value profile. However, it faces cyclical headwinds, regulatory overhangs, and limited growth visibility compared to private peers.

Metric Value Implication

P/E Ratio 8.36 Deep value — significantly below industry average of 11.6

PEG Ratio -1.03 Negative — indicates declining earnings growth

ROE / ROCE 10.7% / 12.4% Moderate — decent but not exceptional

Dividend Yield 5.07% High — attractive for income-focused investors

Debt-to-Equity 0.55 Acceptable — manageable leverage

EPS ₹28.8 Strong — supports low valuation

Profit Growth (QoQ) -14.1% Weak — earnings volatility due to crude price swings

📉 Technical & Trend Analysis

Current Price: ₹241

DMA 50 / DMA 200: ₹244 / ₹249 — trading below both, short-term weakness

RSI: 44.7 — neutral zone, no clear momentum

MACD: -0.66 — mild bearish crossover

Volume: Slightly below average — subdued interest

✅ Is It a Good Long-Term Investment?

Moderately attractive for value and income investors. ONGC is not a high-growth stock, but it offers a strong dividend yield, low valuation, and stability. Ideal for conservative portfolios or those seeking exposure to energy with limited downside.

🎯 Ideal Entry Price Zone

Buy Zone: ₹225–₹235

Near support levels and below book value

Accumulate if crude prices stabilize and dividend payout remains strong

Avoid chasing above ₹265 unless earnings rebound

🧭 Exit Strategy & Holding Period

If you're already holding

Holding Period: 2–4 years — for dividend income and potential re-rating

Exit Strategy

Partial Exit near ₹320–₹345 if P/E expands >10 and dividend yield drops below 3%

Hold if ROE stays >10% and payout ratio remains consistent

Reassess if crude prices fall sharply or government intervention increases

Would you like a dividend-focused portfolio comparison with other PSU stocks like Coal India, NTPC, or Power Grid?

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