Oil and Natural Gas (NSEI:ONGC) - Share price, News & Analysis

Q: What is the Fair Price of ONGC when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

ONGC (₹133.9) is trading below our estimate of [[fair value]] (₹186.19)

ONGC fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	0/6
Past Performance	5/6
Financial Health	2/6
Dividends	5/6

ONGC Stock Overview

Oil and Natural Gas Corporation Limited explores for, develops, and produces crude oil and natural gas in India and internationally.

Rewards

Trading at 28.1% below our estimate of its fair value

Earnings grew by 132.7% over the past year

Trading at good value vs. peer average Price-To-Earnings ratio

Trading at good value vs. industry average Price-To-Earnings ratio

Trading below our calculated fair Price-To-Earnings ratio

Risk Analysis

Earnings are forecast to decline by an average of 7% per year for the next 3 years

Has a high level of debt

Unstable dividend track record

Oil and Natural Gas Competitors

Coal India

NSEI:COALINDIA

₹1.4t

Indian Oil

NSEI:IOC

₹926.8b

Bharat Petroleum

NSEI:BPCL

₹675.6b

Petronet LNG

NSEI:PETRONET

₹305.0b

Price History & Performance

Summary of all time highs, changes and price drops for Oil and Natural Gas
Historical stock prices
Current Share Price	₹133.90
52 Week High	₹194.95
52 Week Low	₹119.85
Beta	0.95
1 Month Change	0.37%
3 Month Change	8.42%
1 Year Change	-20.35%
3 Year Change	6.40%
5 Year Change	-20.84%
Change since IPO	151.06%

Shareholder Returns

	ONGC	IN Oil and Gas	IN Market
7D	9.3%	3.9%	2.0%
1Y	-20.3%	-8.2%	-0.7%

Return vs Industry: ONGC underperformed the Indian Oil and Gas industry which returned -9.3% over the past year.

Return vs Market: ONGC underperformed the Indian Market which returned -1.7% over the past year.

Price Volatility

Is ONGC's price volatile compared to industry and market?
ONGC volatility
ONGC Average Weekly Movement	4.1%
Oil and Gas Industry Average Movement	4.8%
Market Average Movement	5.9%
10% most volatile stocks in IN Market	9.2%
10% least volatile stocks in IN Market	3.8%

Stable Share Price: ONGC is less volatile than 75% of Indian stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: ONGC's weekly volatility (4%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1993	27,165	Vivek Tongaonkar	https://www.ongcindia.com

Oil and Natural Gas Corporation Limited explores for, develops, and produces crude oil and natural gas in India and internationally. It operates through two segments, Exploration and Production, and Refining & Marketing. The company also engages in the refining and marketing of petroleum products; transportation of oil and natural gas; and production of liquefied petroleum gas, butane, ethane/propane, naphtha, kerosene oil, low sulphur heavy stock, aviation turbine fuel, mineral turpentine oil, carbon credits, and diesel.

Oil and Natural Gas Fundamentals Summary

How do Oil and Natural Gas's earnings and revenue compare to its market cap?
ONGC fundamental statistics
Market Cap	₹1.68t
Earnings (TTM)	₹514.74b
Revenue (TTM)	₹5.66t

3.3x

P/E Ratio

0.3x

P/S Ratio

Is ONGC overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
ONGC income statement (TTM)
Revenue	₹5.66t
Cost of Revenue	₹4.53t
Gross Profit	₹1.13t
Other Expenses	₹616.53b
Earnings	₹514.74b

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	40.92
Gross Margin	19.98%
Net Profit Margin	9.09%
Debt/Equity Ratio	45.8%

How did ONGC perform over the long term?

See historical performance and comparison

Dividends

7.8%

Current Dividend Yield

26%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is ONGC undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for ONGC?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for ONGC. This is calculated by dividing ONGC's market cap by their current preferred multiple.
What is ONGC's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	₹1.68t

ONGC key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.5x
Enterprise Value/EBITDA	3.6x
PEG Ratio	-0.5x

Price to Earnings Ratio vs Peers

How does ONGC's PE Ratio compare to its peers?

ONGC PE Ratio vs Peers

The above table shows the PE ratio for ONGC vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	12.2x
COALINDIA Coal India	6x	-9.2%	₹1.4t
IOC Indian Oil	5x	3.3%	₹926.8b
BPCL Bharat Petroleum	29.1x	31.5%	₹675.6b
PETRONET Petronet LNG	8.7x	11.4%	₹305.0b
ONGC Oil and Natural Gas	3.3x	-7.0%	₹1.7t

Price-To-Earnings vs Peers: ONGC is good value based on its Price-To-Earnings Ratio (3.3x) compared to the peer average (12.2x).

Price to Earnings Ratio vs Industry

How does ONGC's PE Ratio compare vs other companies in the IN Oil and Gas Industry?

Price-To-Earnings vs Industry: ONGC is good value based on its Price-To-Earnings Ratio (3.3x) compared to the Indian Oil and Gas industry average (17.7x)

Price to Earnings Ratio vs Fair Ratio

What is ONGC's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

ONGC PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	3.3x
Fair PE Ratio	6.8x

Price-To-Earnings vs Fair Ratio: ONGC is good value based on its Price-To-Earnings Ratio (3.3x) compared to the estimated Fair Price-To-Earnings Ratio (6.8x).

Share Price vs Fair Value

What is the Fair Price of ONGC when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: ONGC (₹133.9) is trading below our estimate of fair value (₹186.19)

Significantly Below Fair Value: ONGC is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.

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Future Growth

How is Oil and Natural Gas forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

-7.0%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: ONGC's earnings are forecast to decline over the next 3 years (-7% per year).

Earnings vs Market: ONGC's earnings are forecast to decline over the next 3 years (-7% per year).

High Growth Earnings: ONGC's earnings are forecast to decline over the next 3 years.

Revenue vs Market: ONGC's revenue is expected to decline over the next 3 years (-10% per year).

High Growth Revenue: ONGC's revenue is forecast to decline over the next 3 years (-10% per year).

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: ONGC's Return on Equity is forecast to be low in 3 years time (14.8%).

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Past Performance

How has Oil and Natural Gas performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

21.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: ONGC has high quality earnings.

Growing Profit Margin: ONGC's current net profit margins (9.1%) are higher than last year (5.4%).

Past Earnings Growth Analysis

Earnings Trend: ONGC's earnings have grown significantly by 21.4% per year over the past 5 years.

Accelerating Growth: ONGC's earnings growth over the past year (132.7%) exceeds its 5-year average (21.4% per year).

Earnings vs Industry: ONGC earnings growth over the past year (132.7%) exceeded the Oil and Gas industry 59.3%.

Return on Equity

High ROE: ONGC's Return on Equity (18%) is considered low.

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Financial Health

How is Oil and Natural Gas's financial position?

Financial Health Score

2/6

Financial Health Score 2/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: ONGC's short term assets (₹1,060.6B) do not cover its short term liabilities (₹1,274.2B).

Long Term Liabilities: ONGC's short term assets (₹1,060.6B) do not cover its long term liabilities (₹1,747.0B).

Debt to Equity History and Analysis

Debt Level: ONGC's net debt to equity ratio (41.5%) is considered high.

Reducing Debt: ONGC's debt to equity ratio has increased from 40% to 45.8% over the past 5 years.

Debt Coverage: ONGC's debt is well covered by operating cash flow (60.2%).

Interest Coverage: ONGC earns more interest than it pays, so coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is Oil and Natural Gas's current dividend yield, its reliability and sustainability?

Dividend Score

5/6

Dividend Score 5/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

7.84%

Current Dividend Yield

Dividend Yield vs Market

Oil and Natural Gas Dividend Yield vs Market

How does Oil and Natural Gas dividend yield compare to the market?
Segment	Dividend Yield
Company (Oil and Natural Gas)	7.8%
Market Bottom 25% (IN)	0.4%
Market Top 25% (IN)	1.6%
Industry Average (Oil and Gas)	2.4%
Analyst forecast in 3 Years (Oil and Natural Gas)	10.1%

Notable Dividend: ONGC's dividend (7.84%) is higher than the bottom 25% of dividend payers in the Indian market (0.36%).

High Dividend: ONGC's dividend (7.84%) is in the top 25% of dividend payers in the Indian market (1.59%)

Stability and Growth of Payments

Stable Dividend: ONGC's dividend payments have been volatile in the past 10 years.

Growing Dividend: ONGC's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (25.7%), ONGC's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonably low cash payout ratio (39.5%), ONGC's dividend payments are well covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

1.3yrs

Average management tenure

CEO

Vivek Tongaonkar

0.75yr

Tenure

Shri. Vivek Chandrakant Tongaonkar serves as Chief Executive Officer at Oil and Natural Gas Corporation Limited since January 01, 2022. He served as Chief Financial Officer at Oil and Natural Gas Corporati...

Leadership Team

Experienced Management: ONGC's management team is not considered experienced ( 1.3 years average tenure), which suggests a new team.

Board Members

Experienced Board: ONGC's board of directors are not considered experienced ( 0.9 years average tenure), which suggests a new board.

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

NSEI:ONGC Recent Insider Transactions by Companies or Individuals
Date	Value	Name	Entity	Role	Shares	Max Price
13 Apr 22	Sell₹325,540,770	India	Company		2,037,177	₹159.80

Ownership Breakdown

What is the ownership structure of ONGC?
Owner Type	Number of Shares	Ownership Percentage
Individual Insiders	10,428	0.0%
General Public	1,050,545,608	8.4%
Public Companies	1,295,286,744	10.3%
Institutions	2,824,286,593	22.5%
State or Government	7,410,149,833	58.9%

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Top Shareholders

Top 25 shareholders own 73.3% of the company

Ownership	Name	Shares	Current Value	Change %	Portfolio %
58.89%	India	7,408,866,983	₹992.0b	-0.03%	no data
7.84%	Indian Oil Corporation Limited	986,885,142	₹132.1b	0%	no data
2.45%	GAIL (India) Limited	308,401,602	₹41.3b	0%	no data
1.18%	The Vanguard Group, Inc.	148,224,746	₹19.8b	1.46%	0.01%
1.05%	FMR LLC	131,975,109	₹17.7b	0%	0.02%
0.61%	BlackRock, Inc.	76,891,126	₹10.3b	1.12%	no data
0.23%	Grantham Mayo Van Otterloo & Co. LLC	29,189,638	₹3.9b	17.13%	0.17%
0.14%	Geode Capital Management, LLC	17,383,401	₹2.3b	2.12%	no data
0.11%	Strategic Advisers LLC	14,398,083	₹1.9b	-29.8%	0.02%
0.074%	Kotak Mahindra Asset Management Company Limited	9,335,216	₹1.2b	572.78%	0.09%
0.073%	Pacific Investment Management Company LLC	9,237,361	₹1.2b	0.15%	0.07%
0.069%	Dimensional Fund Advisors LP	8,658,718	₹1.2b	0.85%	no data
0.068%	abrdn plc	8,511,693	₹1.1b	-1.42%	0.01%
0.065%	BNY Mellon Asset Management	8,169,026	₹1.1b	1.15%	no data
0.053%	SEI Investments Company	6,662,579	₹892.1m	9.42%	0.02%
0.052%	State Street Global Advisors, Inc.	6,574,930	₹880.4m	3.49%	no data
0.052%	Janus Henderson Group plc	6,517,948	₹872.8m	0%	0.01%
0.051%	J.P. Morgan Asset Management, Inc.	6,362,031	₹851.9m	-23.34%	no data
0.044%	Caisse de dépôt et placement du Québec	5,484,459	₹734.4m	0%	0.01%
0.039%	Thornburg Investment Management, Inc.	4,860,889	₹650.9m	0%	0.06%
0.037%	Wellington Management Group LLP	4,697,477	₹629.0m	-0.65%	no data
0.037%	AP Fonden 7	4,658,474	₹623.8m	0%	0.01%
0.027%	Axis Asset Management Company Limited	3,357,572	₹449.6m	1.22%	0.03%
0.024%	Russell Investment Management, LLC	2,975,599	₹398.4m	0%	0.01%
0.024%	Tata Asset Management Limited	2,956,809	₹395.9m	-32.95%	0.08%

Ticker	Exchange	Primary Security	Security Type	Country	Currency	Listed on
500312	BSE (Mumbai Stock Exchange)	Yes	Equity Shares	IN	INR	Aug 1995
ONGC	NSEI (National Stock Exchange of India)	Yes	Equity Shares	IN	INR	Aug 1995

Data	Last Updated (UTC time)
Company Analysis	2022/10/05 00:00
End of Day Share Price	2022/10/04 00:00
Earnings	2022/06/30
Annual Earnings	2022/03/31