The consensus analyst price target for Oil and Natural Gas was held steady at ₹273.41, as analysts balanced improving auto and industrial trends and robust AI demand against ongoing margin pressures, muted near-term recovery, and concerns about overexposure to the auto sector.
Analyst Commentary
- Auto and industrial segments are showing mixed but improving trends, with China EV pipeline remaining resilient while U.S. and European auto demand lags.
- Gross margins are under ongoing pressure, particularly due to the dilutive impact and slower growth of the Silicon Carbide business, as well as continued portfolio and manufacturing rationalization.
- Inventory build and tariff-related pull-ins have helped near-term results but have raised concerns about sub-seasonal performance and slower demand in the second half of the year.
- Bullish analysts highlight On Semi’s strong positioning and opportunity in auto (especially power/connectivity/sensing), data center markets, and robust AI demand, viewing pullbacks as potential entry points.
- Bearish analysts cite muted sales recovery, recovery timing uncertainty, On Semi’s overexposure to the auto sector, limited near-term margin improvement, and increased reliance on China as key causes for caution.
What's in the News
- ONGC commenced sales of 1.0 million standard cubic meters/day of natural gas from the Chinnewala Tibba block in Rajasthan, integrating supplies into the regional power grid and advancing domestic energy production.
- ONGC Energy Centre Trust partnered with Engineers India Limited to establish a Helium Recovery Demonstration Plant in Tamil Nadu, aiming to produce high-purity helium domestically and reduce import dependence.
- ONGC signed Joint Operating Agreements with Oil India Limited for three new blocks (two onshore, one ultra-deepwater) covering 10,964 sq. km in Assam, Gujarat, and Mahanadi Basin for hydrocarbon exploration, and with BP Exploration and Reliance Industries for offshore exploration in the Saurashtra Basin.
- ONGC reported marginal increases in standalone crude oil production year-over-year, while natural gas production showed a slight decline for both ONGC and its JVs.
- Successful well control and capping operations were completed at Well RDS#147A following a blowout, with all safety protocols observed and no reported injuries.
Valuation Changes
Summary of Valuation Changes for Oil and Natural Gas
- The Consensus Analyst Price Target remained effectively unchanged, at ₹273.41.
- The Future P/E for Oil and Natural Gas remained effectively unchanged, at 9.76x.
- The Consensus Revenue Growth forecasts for Oil and Natural Gas remained effectively unchanged, at 1.2% per annum.
Disclaimer
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