ONGC (Oil & Natural Gas Corporation Ltd.) a 'Buy'-Business Standard.
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The spurt in international crude oil has come as a major gain for ONGC, the oil exploration and production major. For every rise in crude oil prices, ONGC will receive higher price for the crude produced. According to analysts, ONGC will gain over Rs 1,500 crore in the current financial year. And if crude oil prices rise further, ONGC's bottomline will surge even further.
ONGC produces around 27 million a tonnes of crude, which would translate into around 198 million barrels a year. Hence the company would receive $356 million or Rs 1532 crore for a full year on the basis of the current prices. Until last year, ONGC received Rs 3,649 per tonne, which was equivalent to $11.10 per barrel as global crude oil prices were at rock bottom.
For the nine months ended December 1998, ONGC registered a turnover of Rs 11,158.57 and a net profit of Rs 1879.47 crore. ONGC has envisaged an accretion to reserves of 42 million tonnes in 1998-99. At the current market price of Rs 167.55 it is an good buy.
(Source:BS/Smart Investor May 17-23,1999) |
