ICICI Direct has a hold rating on the stocks of Coal India and ONGC with price targets that are relatively modest. Here is what the broking firm feels on the two stocks.
ICICI Direct has a hold rating on the stock of ONGC with a price target of Rs 110 per share.
"ONGC declared its O3FY20 results that were below our estimates on the profitability front, mainly due to higher depreciation & amortisation costs and lower other income. Revenues declined 3.2% QoQ at Rs 23710.1 crore (our estimate: Rs 22823.2 crore) on account of marginally lower realisations as well as sales volume QoQ," the firm said in its report.
"We value core business i.e. standalone & OVL at Rs 90 per share (6x FY22E core earnings) & investments at Rs 20 per share (50% discount to current Mcap)," it further added.
Shares of ONGC were last seen trading at Rs 102.40 on the NSE.
ICICI Direct has a hold rating on the stock of Coal India with a price target of Rs 200 on the stock.
"Coal India reported a steady operational performance for Q3FY20. Going forward, we model sales volume of 600 metric tonnes for FY20E and 625 metric tonnes for FY21E.
Furthermore, we expect EBITDA margins to remain steady at 21-22 per cent over the next couple of years. We value the stock at 5x FY21E adjusted EV/EBITDA and arrive at a target price of Rs 200. We maintain our HOLD recommendation," the company has said in its research report.
The shares of Coal India were last trading at Rs 126.10 on the NSE.
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Sunil Fernandes is the Managing Editor of GoodReturns.in with 25-years of experience. Prior to this, he has worked with frontline newspapers and magazines including Dalal Street Investment Journal, Deccan Herald, Hindustan Times, Oman Economic Review and Gulf Times.