Risk Reward Update

Research evidence excerpt

Risk Reward Update

UpdateM

RiskRisk RewardReward– Oil & Natural- Oil &GasNaturalCorp. (ONGC.NS)Gas Corp. (ONGC.NS)

Monetisation finally coming through

PRICE TARGET Rs331.00 OVERWEIGHT THESIS

Base case, sum of the parts ▪ONGC is now a mixed gas and oil play, and

ONGC and ONGC Videsh Ltd (100%-owned subsidiary): WACC 12%, terminal growth is much less leveraged to oil than it was

rate 0%. before Covid. As India's largest gas producer,

51.11% stake in HPCL: 30% holdco discount to market price. its exposure to gas increases with a rise in

We add the value of equity investments in IOCL, GAIL, PLNG and MRPL at a 40% discounts gas ASPs along with a favourable production

to their current market prices to factor in market volatility. curve driven by gas demand.

associated with ONGC are now Rs311.77 ▪Risks

lower than they have been historically,

Consensus Price Target Distribution Rs230.00 Rs405.00 reflecting policy reform tailwinds for E&Ps MS PT

and the de-risking of production growth.Source: Refinitiv, Morgan Stanley Research Mean Morgan Stanley Estimates

▪We think the market underappreciates the

shift from APM mix to deepwater + new

wells gas mix, as India's gas prices are

RISK REWARD CHART pegged to global market prices.

▪We prefer ONGC to OIL for ONGC's

reserve replacement ratio, higher natural

INR Rs440.00Rs440.00(+84.17%)Rs440.00(+84.17%)(+84.17%) gas price realisation and faster monetisation

of reserves.

Consensus Rating Distribution

Rs331.00Rs331.00(+38.55%)Rs331.00(+38.55%)(+38.55%)

300 67% Overweight

Rs238.91Rs238.91Rs238.91 20% Equal-weight

13% Underweight

Rs206.00Rs206.00(-13.78%)Rs206.00(-13.78%)(-13.78%) MS Rating

Source: Refinitiv, Morgan Stanley Research

Risk Reward Themes

JUL '25 JAN '26 JUL '26 JUL '27 Self-help: Positive