REDUCE on ONGC - Muted performance - HDFC Securities Posted On: 2021-02-16 04:37:24 (Time Zone: Arizona, USA) Mr. Harshad Katkar, Institutional Research Analyst, HDFC Securities & Mr. Nilesh Ghuge, Institutional Research Analyst, HDFC Securities Our REDUCE recommendation on ONGC with a price target of INR 101 is premised on (1) muted crude oil and gas realisations and (2) lack of production growth for oil. We expect oil prices to remain at ~USD 50/bbl in FY22/23E vs. USD 59/bbl in FY20, given the weak global macro. Lower oil and gas realisations will drag profitability down for ONGC. 3QFY21 revenue was 4% above our estimate, owing to a higher-than-expected crude oil price realisation of USD 44.2/bbl (vs the estimated USD 43.4/bbl). EBITDA in 3Q was 18% above our estimate owing to lower-than-expected opex. APAT was 15% below our estimate due to higher-than-anticipated finance cost and tax outgo.