Brokerage firm Elara Capital recommends buying ONGC shares with a target price of 320 rupees

Brokerage firm Elara Capital has advised investors to buy shares of Oil and Natural Gas Corporation Limited, pointing to growth opportunities amid crude oil price swings driven by the US-Iran conflict. The firm set a target price of 320 rupees per share, which points to an upside potential of up to 38 percent.

Financial Results

State-owned ONGC reported a 46.9 percent jump in consolidated profit after tax to 18,534.82 crore rupees for the second quarter, compared to 12,614.60 crore rupees in the same period last year. Consolidated revenue from operations grew 25.6 percent to 1,98,263.33 crore rupees. On a standalone basis, profit surged 57.3 percent to 15,489 crore rupees. However, performance dipped compared to the previous quarter, with standalone profit falling 9.1 percent and revenue dropping 5.6 percent. Alongside these results, the board announced a first interim dividend of 8 rupees per share, with November 12, 2026, set as the record date.

Production Challenges

Elara Capital noted that the biggest disappointment in the second quarter came from production, as crude oil output dropped 5.3 percent year-on-year and natural gas fell 2.3 percent. The drop was mainly caused by reservoir issues at KG-98/2, monsoon delays at PRP-8/9, and temporary customer disruptions. The brokerage believes these are execution problems rather than structural flaws, and expects production to recover through new gas volumes, completed wells, and new offshore projects worth 11,800 crore rupees.

Context

Oil and Natural Gas Corporation is a major state-owned energy explorer that supplies a large share of India's crude oil and natural gas. Brokerage firms regularly review such public sector undertakings by analyzing their quarterly earnings, production data, and market valuations to guide investors on potential stock returns.