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ONGC Share Price Outlook: What Investors Need to Know for 2024

by Busines Newswire
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ONGC is the most common name you must have heard when discussing the largest oil and gas product company. Indeed, the company’s share prices are immense. Hence, even mild fluctuations can considerably affect the National Stock Exchange. 

The present condition of ONGC shares is quite lucrative; hence, investing in them might be profitable for some. However, investing requires more than just learning the present share value. There are various other things to consider as well. 

If you plan on investing, ensure you know the present and predictive ONGC Share Price and the factors that can influence its price. Read this article to learn all about this company and its growth potential for the next few years. Scroll down for more information. 

The Share Price Insights 

The recent value of the company’s share ranges from 252.85 INR to 271.10 INR. As of the present, the company is debt-free. Its market capitalisation on NSE is Rs.352373.62Cr. The PE and PB ratios are 9.21 and 1.26, respectively. This might not be an extremely fluctuating share, but it is unstable. For instance, the price has increased by 24.53% in the last year but has shown a dip of 10.01% over the past five days. However, to ensure a balance, the stop loss can be set at INR 175 to avoid drastic losses if the share price falls. 

Though, according to the present market value, the share is undervalued by 35%, the earnings and savings rate are predicted to increase by 7% and 6.7%, respectively. Additionally, it offers around 30% to 40% of its annual profit as dividends. Based on the company’s history and future ventures, a yearly prediction will be released by 2030. 

Let us glance at the company’s forecasted growth over the next few years. 

Valuation  Year
267.68 INR 2024
338.01 INR. 2025
364.6 INR 2026
392.51 INR. 2027
421.71 INR 2028
452.37 INR 2029
484.62 INR 2030

Factors Influencing The Growth

Indeed, the company has the second highest market capitalisation in the industry after Reliance. Moreover, the price has increased 44% in the last six months and 83% in the past year. 

But does this mean we readily invest in the share? No really. Indeed, several reliable reports claim that the company will witness a 7.84% CAGR growth in the next four years. However, looking at some factors and then deciding for yourself is essential. Here, we will share a few elements that can determine the rise and fall of the share price. 

  • Company’s Background

ONGC is one of the country’s most substantial oil and natural gas companies. It constitutes almost 76% of the nation’s oil and natural gas production. It also has a subsidiary company, HPCL, which manufactures kerosene, diesel, naphtha, gasoline, etc. Furthermore, it also serves as a central public sector enterprise. Hence, the company is a potential stock to invest in. 

  • Collaborations

Considering the company’s various collaborations and tie-ups is paramount. Sometimes, the partner company’s fluctuations influence the other’s share prices. In this case, ONGC has recently signed an MoU with HDFC Bank and seven other banks to fund their subsidiary company, HPCL. Hence, this calls for monitoring the HDFC bank share price and that of the other banks. This will help you predict the future of the company’s share prices. 

  • Financial History

The company suffered a 33.5% decline due to GST on royalty and other taxation factors. However, due to the increase in the crude oil sector, the company’s revenue also spiked by 28.8%. The year-over-year decline was over 5 million, though the production for 2024 was over 5 million. The major reasons were delays in project execution, lesser-than-expected results, reservoir challenges, and many more. However, if you compare other private sectors and ONGC, the latter has the highest production percentage of crude oil and natural gas. 

  • SWOT Analysis Results

Last but not least, consider the company’s strengths, weaknesses, opportunities, and potential threats. This will enable you to gauge how and when to invest in the company. 

The greatest strength of ONGC is that it is a multinational company offering its products in countries like Iran, Syria, Israel, Iraq, Myanmar, Libya, Vietnam, Mozambique, Kazakhstan, etc. Hence, revenue is earned from each of these countries through its wholly-owned subsidiary, ONGC Videsh Limited. Lastly, the in-house service facility helps the company soar higher than its contemporaries.

However, the share price decreased considerably due to marginal fields, the Panna-Mukta plant shutdown, leakage in Southern plants, and other technical difficulties. The company has thus taken various steps to prevent these inconveniences. 

The various subsidiaries of the company and its proactive steps to provide more improved infrastructure will allow them to become more widespread and recover from past losses. Additionally, they plan to engage in INR 10,000 crore exploratory activities over three years. 

Yet, the threat to the sector cannot be denied as the usage of renewable resources is becoming increasingly popular. For instance, the rapidity with which electric vehicles take over petrol—or diesel-powered vehicles is a potential threat to this sector. 

Things To Consider Before Investing

Are you keen on investing in ONGC? Then make sure you are keeping a few things in mind, like

  • The risk factor that can bring down the share prices dramatically
  • The funds return, availability, category, and types also need to be adequately researched
  • Remember to look out for past trends, financial statements and ratios, profit and loss and expense ratios.
  • Lastly, the tax implications on the share should be checked, and the influence of the tax on the share should be observed in the past quarters.

Wrapping Up

ONGC is a multinational company with a considerable turnover. Though the stocks have been fluctuating mildly, nothing can be said about the uncertainties associated with it. Hence, it is recommended that you properly research and gain wholesome knowledge about the stock before investing.