MarketsMOJO Upgrades ONGC to 'Buy' Rating Due to Strong Financials and Positive Market Performance

Oil & Natural Gas Corporation (ONGC) has recently received a 'Buy' rating from MarketsMOJO, a leading financial analysis firm. This upgrade comes as a result of the company's strong financials and positive market performance.
One of the key factors contributing to the 'Buy' rating is ONGC's low Debt to Equity ratio, which is currently at 0.46 times. This indicates that the company has a healthy balance sheet and is not heavily reliant on debt to finance its operations.

Moreover, the stock is currently in a Bullish range and the technical trend has improved from Mildly Bullish on 11-Jun-24. This is supported by multiple factors such as MACD, Bollinger Band, KST, and OBV, all of which are showing a bullish trend for the stock.

In terms of valuation, ONGC is considered to be very attractive with a ROCE of 16.4 and an Enterprise value to Capital Employed ratio of 1. This indicates that the stock is trading at a discount compared to its average historical valuations.

Furthermore, ONGC has a strong track record of generating profits, with a PEG ratio of 0.5. In the past year, the stock has generated a return of 77.37%, while its profits have risen by 14.4%. Additionally, the company offers a high dividend yield of 3.8%, making it an attractive option for investors.

Another positive aspect of ONGC is its high institutional holdings at 38.06%. This means that these investors have better capability and resources to analyze the fundamentals of the company, making their investment in ONGC a positive sign for retail investors.

In terms of market performance, ONGC has outperformed the market (BSE 500) with a return of 77.37% in the last year, compared to the market's return of 36.93%. With a market cap of Rs 3,25,955 crore, ONGC is the second biggest company in the oil exploration/refineries sector, behind only Reliance Industries. Its annual sales of Rs 643,037.01 crore also make up a significant portion (18.92%) of the industry.

However, there are some risks associated with investing in ONGC. The company's results for March 2024 were flat, with a decrease in PBT LESS OI(Q) and PAT(Q) at -12.6% and -8.6%, respectively. This could potentially impact the stock's performance in the short term.

Overall, with its strong financials, positive market performance, and attractive valuation, ONGC is a 'Buy' for investors looking to invest in the oil exploration/refineries sector.