“Among the global upstream peer group, it is the cheapest stock. ONGC historically has traded at a discount versus global peer group, but over the past 12 months, the discount has widened materially, and in our view, the ‘on-tap’ government selldown is the key reason,” JP Morgan analysts Pinakin Parekh and Sanket Parab write in a note.
The brokerage has a buy rating on the stock, albeit it has cut the price target from Rs 190 to Rs 172 due to a cut in earnings estimates amid weak global oil prices. JP Morgan says the stock offers attractive yields of about 8 per cent. It has identified a few other triggers for ONGC to do well.