Prabhudas Lilladher has recommended an 'Accumulate' rating on ONGC with a revised target price of ₹297 in its research report dated May 27, 2026. According to the brokerage's latest assessment, the target price has been revised down from the earlier ₹309, based on 9x FY28E EPS for the standalone business along with the addition of investment value. However, Motilal Oswal has issued a 'Neutral' rating on the same day with a target price of ₹265, citing different methodology and outlook. Motilal Oswal's target price is based on a Sum-of-the-Parts (SoTP) valuation approach, modeling a CAGR of 2.7%/3.7% in oil/gas production volumes over FY26-28.
ONGC's Q4 FY26 standalone revenue came in line with estimates at ₹359 billion, as reported by Motilal Oswal. However, crude oil and gas sales volumes were 4% and 5% below estimates at 4.6 million metric tonnes and 3.8 billion cubic meters respectively. Crude oil production declined 3% quarter-on-quarter and 6% year-on-year, while natural gas production fell 4% QoQ and 3% YoY. The weakness in oil production was attributed to geological complexities at the 98/2 field in the Eastern offshore and operational issues at the DUDP project. Adjusted EBITDAX (ex GST provision) came in 7% below estimates at ₹178 billion, impacted by higher employee and other expenses. Adjusted PAT stood 11% below estimates at ₹67 billion, with exchange loss contributing ₹11.8 billion in Q4 FY26.
According to Prabhudas Lilladher's analysis, ONGC plans to drill approximately 500 wells, including around 400 developmental wells. Management indicated that future production volumes will increasingly tilt toward gas, supported by a rising contribution from NWG volumes. The brokerage maintains conservative production assumptions given the continued weakness in recent production trends. For FY27, the firm estimates standalone production at 19.8 million metric tonnes for oil and 20.1 billion cubic meters for gas, with FY28 projections showing oil production of 20.6 million metric tonnes and gas production of 21.2 billion cubic meters.
Adjusted PAT came in at ₹73.0 billion, down 17.2% QoQ while up 6.0% YoY. As reported by Prabhudas Lilladher, the adjusted profit after tax showed mixed quarterly and yearly trends, with the sequential decline attributed to operational factors. The company's performance reflects the impact of higher crude oil realizations being offset by lower sales volumes, resulting in overall revenue growth despite volume challenges. Crude oil realization increased to USD 78.3 per barrel (+27.1% QoQ; +6.2% YoY).
