A strong energy demand trajectory typifies a robust economy. Being a fastest developing nation in the world, India’s energy demand trend clearly affirms that. Over the past 10 years (terminal year 2016), India’s energy demand has grown at a pace of 5.7% CAGR versus a world average of 1.7%. Looking further ahead, the demand is expected to intensify as the economy picks up steam. As per the IEA World Energy Outlook 2017, India’s primary energy consumption is set to rise from around 900 Mmtoe in 2016 to 1900 MMtoe in 2040 (3.2% CAGR) under the New Policies scenario. Despite the surge in demand for renewable over the longer term, evolution of the fuel mix still remains a gradual affair, with fossil fuels continuing to account for more than 85% (from over 90% currently) of the energy basket, as per BP Energy Outlook. ONGC and Oil India Ltd. are Navratna PSU companies and we are expecting good returns from here on.
Oil & Natural Gas Corporation Ltd.
BSE Code/ NSE: 500312/ ONGC | Face Value: Rs5 | 52 Weeks H/L (Rs): 191.85 – 127.90 | Market Cap Rs(crore): 20,1802 | Promoter’s Holding: 65.64%
Maharatna ONGC is the largest crude oil and natural gas Company in India, contributing around 70 per cent to Indian domestic production. Crude oil is the raw material used by downstream companies like IOC, BPCL, and HPCL to produce petroleum products like Petrol, Diesel, Kerosene, Naphtha, and Cooking Gas-LPG. It is the only public sector Indian company to feature in Fortune’s ‘Most Admired Energy Companies’ list. ONGC Videsh is a wholly owned subsidiary of Oil and Natural Gas Corporation Limited (ONGC), the National Oil Company of India, and is India’s largest international oil and gas Company. ONGC Videsh has participation in 41 projects in 20 countries namely Azerbaijan, Bangladesh, Brazil, Colombia, Iraq, Israel, Iran, Kazakhstan, Libya, Mozambique, Myanmar, Namibia, Russia, South Sudan, Sudan, Syria, United Arab Emirates, Venezuela, Vietnam and New Zealand. ONGC Videsh maintains a balanced portfolio of 15 producing, 4 discovered/under development, 18 exploratory and 4 pipeline projects. The Company currently operates/ jointly operates 21 projects. ONGC is having 71.62% stake in MRPL & 51.11% stake in HPCL also.
The Company has equity of Rs6416.63 crore while company has huge reserve of around Rs197258.37 crore. Promoters hold 65.64%, FIIs hold 5.89%, DIIs hold 4.25%, LIC hold 9.28% while other investing public hold only 14.94% stake in this company.
Company has posted superb numbers for 9MFY19. During Q3FY19, its PAT zoomed 64.77% to Rs8262.7rore from Rs5014.67rore on 20.43% higher income of Rs27694.09rore fetching an EPS of Rs6.44. For 9MFY19, its PAT zoomed 61.59% to Rs22671.1crore from Rs14030.14 crore in 9MFY18 on 35.82% higher income of Rs82896.09 crore fetching an EPS of Rs17.67.
In June 2014, the stock kissed Rs314.5 level on higher side. In FY14, it has reported PAT of Rs26,506.53 crore. Due to lower crude prices in FY15 and FY16 company has reported lower PAT but it has posted above Rs20,000 crore PAT in FY17 and FY18. It has posted superb numbers in 9MFY19. Now Company is having 51.11% stake in HPCL which is also high profit making company and high dividend paying company. It means the stock is available at a very lower valuation against FY14 and traded at P/E ratio of just 6.3x. The Company has paid 132% dividend for FY18 and paid 125% interim dividend for FY19.
This stock is looking attractive for long term investment and one can buy in staggered manner for long term investment horizon.
Oil India Ltd.
BSE Code/ NSE: 533106/ OIL | Face Value: Rs10 | 52 Weeks H/L (Rs): 247.45 – 166.15 | Market Cap Rs(crore): 19,844 | Promoter’s Holding: 63.05%
Oil India Limited explores for, develops, and produces crude oil and natural gas in India and internationally. The company operates through Crude Oil, Natural Gas, Liquefied Petroleum Gas (LPG), and Pipeline Transportation segments. It is also involved in the transportation of crude oil; and production of LPG, as well as in the provision of exploration and production related services. The company owns and operates 1,157 kilometers of cross-country crude oil pipelines; and 13 drilling rigs and 14 work-over rigs, as well as owns 10 crude oil pumping stations and 17 repeater stations in Assam, West Bengal, and Bihar states. It also provides wireline logging services; and generates energy through wind and solar power projects. In addition, the company has participating interests in NELP exploration blocks in Mahanadi Offshore, Mumbai Deepwater, Krishna Godavari Deepwater, etc., as well as in various projects in Libya, Gabon, the United States, Nigeria, Sudan, Yemen, Venezuela, Mozambique, Myanmar, Bangladesh, Russia, and Israel.
The Company has equity of Rs1134.90 crore while company has huge reserve of around Rs26580.14 crore. Promoters hold 63.05%, FIIs hold 4.52% and DIIs hold 2.73%, LIC hold 12.11%, BPCL hold 2.47%, HPCL hold 2.47%, IOC hold 4.93% while other investing public hold 7.72% stake in this company.
Company has posted superb numbers for 9MFY19. During Q3FY19, net profit soared 74.90% to Rs1233.45 crore from Rs705.22 crore in Q3FY18 on 23.19% higher income of Rs3514.03 crore fetching an EPS of Rs10.87. For 9MFY19, its PAT grew by 55.36% to Rs2798.68 crore from Rs1801.43 crore on 39.04% higher income of Rs10648.07 crore fetching an EPS of Rs24.66.
In September 2014, stock kissed Rs298 level on higher side. In FY14, it has reported PAT of Rs2941.98 crore. It has posted superb numbers in 9MFY19 and may post above FY14 PAT in FY19. Means stock is available very lower valuation against FY14 and traded at P/E ratio of just 5.2x. It has paid 150% dividend for FY18 and paid 85% interim dividend for FY19.
Stock is looking attractive for long term investment and one can buy this stock in staggered manner for long term investment horizon.