The analyst price target for oil and natural gas was reduced slightly from $273.41 to $270.14. Analysts cited continued margin headwinds and muted recovery expectations due to channel inventory build and ongoing manufacturing rationalization.
Analyst Commentary
Recent Street research reflects a mixed sentiment among analysts regarding oil and natural gas equity performance. A range of price target adjustments and rating changes highlight both emerging opportunities and ongoing challenges in the sector.
Bullish Takeaways
- Bullish analysts see solid quarterly results and resilience in key segments such as the automotive division, especially supported by a strong pipeline in electric vehicles within China.
- Some noted that better-than-expected trends in auto and select business lines provided offsets against softer industrial demand. This has supported upward price target revisions in certain cases.
- Improving near-term data points in critical markets, including industrial and auto segments, are interpreted by some as early signals that growth may accelerate in upcoming quarters.
- Coverage initiations with neutral to positive views point to perceived cyclical opportunities and potential for the analog sector to revert to trendline shipments over the next 12 to 18 months.
Bearish Takeaways
- Bearish analysts cite persistent margin pressures, particularly linked to the dilutive impact of the Silicon Carbide business as well as broader gross margin headwinds.
- Muted recovery expectations are attributed to inventory build-up in the distribution channel and ongoing rationalization in manufacturing operations.
- Several firms pointed to continued weakness in U.S. and European automotive demand, with recovery possibly occurring in the latter half of next year.
- Although some execution remains strong, bearish analysts view shares as potentially range-bound in the coming quarters, awaiting clearer growth in data center and higher-margin businesses.
What's in the News
- ONGC commenced natural gas sales from the Discovered Small Field (DSF-II) Block RJ/ONDSF/Chinnewala/2018 in Western Rajasthan. This marks monetisation of Chinnewala Tibba gas and reinforces energy security by supplying to Rajasthan Rajya Vidyut Utpadan Nigam Limited as of August 25, 2025 (Key Developments).
- ONGC Energy Centre Trust signed an agreement with Engineers India Limited to implement a Helium Recovery Demonstration Plant at the Kuthalam Gas Collection Station in Tamil Nadu. The initiative aims to process 750 Nm³/hr of natural gas and develop indigenous helium capability (Key Developments).
- ONGC reported production results for the first quarter and full year ended March 31, 2026, showing stable crude oil and declining joint venture natural gas production compared to the previous year (Key Developments).
- Joint Operating Agreements were signed by ONGC with Oil India Limited and with BP Exploration (Alpha) Ltd. and Reliance Industries Limited for new onland and offshore exploration blocks under OALP Bid Round-IX. This expands exploratory activities across key Indian sedimentary basins (Key Developments).
- Board meetings are scheduled to consider re-appointment of leadership and approval of quarterly financial results, reflecting ongoing administrative and governance activities within ONGC (Key Developments).
Valuation Changes
- Consensus Analyst Price Target has decreased slightly from ₹273.41 to ₹270.14.
- Discount Rate has fallen modestly and is now at 13.92% compared to the previous 14.12%.
- Revenue Growth expectation has risen from 1.23% to 1.62%.
- Net Profit Margin has edged lower, moving from 7.71% to 7.66%.
- Future P/E ratio has declined marginally from 9.76x to 9.54x.
Disclaimer
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