Motilal Oswal upgraded the rating for Oil and Natural Gas Corporation (ONGC) to "Buy" on Monday [1].
The upgrade suggests a shift in investor sentiment toward the state-owned Indian energy giant as market conditions for oil and gas evolve. This move signals confidence in the company's ability to capitalize on global pricing trends and internal operational growth.
According to the brokerage, the decision is based on an inexpensive valuation and a decent pick-up in volume growth [1]. Motilal Oswal analysts said that these factors make the company an attractive option for investors seeking exposure to the energy sector in India [2].
A critical component of the upgrade is a revised assumption regarding Brent crude prices [1]. The brokerage said that this price adjustment directly impacts the company's financial outlook for the coming years.
Based on these revisions, the consensus profit for FY27 is expected to increase by nine% [1]. Furthermore, the projections for FY28 show a more significant lift, with profit expected to rise by 18% [1].
ONGC remains a central figure in India's energy infrastructure. The brokerage's focus on volume growth and valuation indicates that the firm is positioned to benefit from both organic expansion and favorable external market pricing, a combination that typically drives stock performance in the commodities sector [2].
“Motilal Oswal upgraded the rating for Oil and Natural Gas Corporation (ONGC) to "Buy".”
This upgrade reflects a bullish outlook on India's energy sector, specifically tied to the volatility and recovery of global oil prices. By raising profit forecasts for FY27 and FY28 based on Brent price assumptions, Motilal Oswal is betting that ONGC can translate higher global commodity prices into significant bottom-line growth while remaining undervalued by the market.
