Shares of Oil and Natural Gas Corporation Limited (ONGC) moved higher during Monday's trading session, and the trigger was a fresh rating upgrade from brokerage Motilal Oswal. The Maharatna PSU has been a direct beneficiary of the government's multi-year push to turn the sector around, and a mix of cheap valuation, steady volume growth and a strong profit outlook has left the company looking well placed going forward.
At 10:20 am on Monday, July 6, the stock was trading 0.97 percent higher at Rs 240.10 per share on the BSE, taking its market capitalisation to Rs 3,02,304.11 crore. Through the session, the scrip touched an intraday high of Rs 241.20 and slipped to an intraday low of Rs 236.95.
Why the upgrade came
According to the Motilal Oswal report released on Monday, ONGC has sharpened its focus on discovering new reserves. Alongside that, the company is working to monetise its existing oil and gas discoveries on a fast-track basis, while also stepping up exploration and development efforts across its overseas assets. Taken together, these favourable factors position the company for a jump in production volumes and could translate into a healthy dividend yield for shareholders.
"Our upgrade is premised upon a combination of inexpensive valuations, decent volume growth pick-up, and ONGC being a beneficiary of a multi-year government focus to turn around the sector. While a peace MOU has been reached in West Asia, according to forecasts by the US EIA," the report noted.
Target price of Rs 288
The brokerage assigned a 'Buy' rating to ONGC with a target price of Rs 288 per share. It modelled roughly 2.6 percent volume growth overall, made up of 1.6 percent in oil and 3.7 percent in gas. To arrive at that target, the brokerage valued the standalone business at 6.5 times December 2027 EPS, the investments at a 25 percent discount to the current market price (CMP), and the OVL stake at 0.5 times FY25 book value per share (BVPS), which together produced the Rs 288 figure.
How the stock has fared
The stock opened on a decent note on Monday before gaining ground through the session. It had hit its 52-week high of Rs 307.50 per share on April 29, 2026, and touched its 52-week low of Rs 227.60 per share on June 30, 2026. The company carries a return on equity (ROE) of 10.06 percent. That said, its share price has still fallen 14.59 percent over the past three months.
In short, the brokerage's view is that government backing, rising production and an undemanding valuation could help this Maharatna deliver better returns over time, though investors are always advised to make their own decisions based on independent guidance.
