OGDC carries a high weight in PSX indices and pays consistent quarterly dividends. That is reflected in its price stability.
Recent profitability was primarily driven by higher international oil prices and a substantial depreciation of the Pakistani Rupee.
The company has substantial other income linked to interest rates. However, as interest rates decline, this income has decreased, negatively impacting earnings. Given OGDC's minimal finance costs, it does not benefit from lower interest rates.
Its core earnings remain closely tied to international oil prices and exchange rates. With oil prices weak and a further downtrend expected, revenue pressure persists. Additionally, a stronger Pakistani Rupee would negatively affect earnings.
Despite frequent announcements of new discoveries, production has remained sluggish, raising concerns about operational efficiency.
Moreover, an overhang on the stock persists due to the potential for a tranche offer for sale at the exchange.
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