ONGC and Oil India Shares Drop 4% as Brent Crude Prices Fall Below $100
ONGC, OIL fall 4% as Brent crude tumbles below $100 on US-Iran ceasefire
Business Standard
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Shares of Oil and Natural Gas Corporation (ONGC) and Oil India fell by over 4% following a significant drop in Brent crude prices, which fell below $100 per barrel after a US-Iran ceasefire announcement. Analysts expect ONGC and Oil India to report increased earnings despite the price drop, driven by higher crude oil realizations.
- 01ONGC shares fell 4.11% and Oil India shares dropped 4.02% due to falling oil prices.
- 02Brent crude futures declined 13% to $94.95 per barrel, below the $100 mark.
- 03Analysts predict ONGC's Q4FY26 Ebitda will rise 23% quarter-on-quarter to ₹18,800 crore.
- 04Oil India's standalone Ebitda is expected to increase by 49% quarter-on-quarter to ₹2,700 crore.
- 05ICICI Securities maintains a 'Buy' rating on ONGC and an 'Add' rating on Oil India.
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Shares of Oil and Natural Gas Corporation (ONGC) and Oil India experienced a decline of 4.11% and 4.02% respectively on April 8, 2023, following a sharp drop in Brent crude prices, which fell 13% to $94.95 per barrel. This decline was triggered by a ceasefire agreement between the US and Iran, allowing safe passage through the Strait of Hormuz. The fall in oil prices typically impacts the revenues of upstream oil companies like ONGC and Oil India, as their earnings are closely tied to crude oil prices. Despite the current price drop, analysts from Nomura expect ONGC to report a 23% increase in Ebitda for Q4FY26, amounting to ₹18,800 crore, driven by higher crude oil realizations. Similarly, Oil India is projected to see a 49% increase in Ebitda, reaching ₹2,700 crore. ICICI Securities has a 'Buy' rating on ONGC with a target price of ₹374 per share and an 'Add' rating on Oil India with a target of ₹505 per share, indicating confidence in their long-term performance despite the current market fluctuations.
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The decline in oil prices may lead to lower revenues for ONGC and Oil India, potentially affecting their stock performance and investor sentiment. However, the anticipated increase in earnings could provide some stability for investors.
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