On Monday, shares of Oil & Natural Gas Corporation (ONGC) Limited rose 4% to an intraday high of Rs 101. Since November, the stock has climbed 55.6%, while from the start of December it is up 28.6% as COVID-19 vaccine progress raised hopes of recovery in fuel demand.
Morgan Stanley has upgraded ONGC to 'overweight' from 'equal-weight' and raised its price target to Rs 115 from Rs 84 citing a higher probability of recovery in average selling prices, improved outlook on domestic production and upside in refining associates post closures.
JM Financial has upgraded its FY22 PAT (profit after tax) estimates for the company by 30%.
"We upgrade ONGC as tactical buy on rising crude price. ONGC is our preferred play due to its relatively better production growth visibility and higher leverage to crude price. ONGC could also benefit from potential deregulation/hike in domestic gas prices. Hence, we upgrade our target price for ONGC to Rs 120," the brokerage said.