On 1 July 2022, Indian share markets fell for the third day in a row.
Amid this decline, shares of oil & gasoline corporations additionally fell. All of the beneficial properties made by vitality corporations eroded inside a day.
Shares of Reliance fell 8% whereas shares of Oil India fell by a whopping 15%.
Amongst these shares was additionally ONGC. The corporate’s shares fell by 13% in a single day.
So, what led to this downfall?
On 1 July 2022, the Authorities of India introduced that it could impose taxes on the export of petrol, diesel, and jet gasoline shipped abroad by Indian corporations.
It could levy a tax of Rs 6 per litre on exports of petrol and ATF (Aviation Turbine Gasoline) and a tax of Rs 13 per litre on the export of diesel within the nation.
This step was taken to ease the scarcity of gasoline in India.
You see, many elements of India, reminiscent of Gujarat, Rajasthan, and Madhya Pradesh, have been out of gasoline for months as refineries have elevated their exports to Europe and the US amid the Russia-Ukraine battle.
This has led to a scarcity in Indian markets.
The federal government then additional introduced a windfall tax on oil-producing corporations. A windfall tax is a better tax levied on the beneficial properties of sure corporations.
The federal government stated it could implement a further cess of Rs 23,230 per barrel on home crude oil manufacturing.
Home suppliers of crude oil have been promoting crude oil at worldwide costs. This has led to a windfall achieve by the producers as a consequence of a rise in realizations.
This may be seen within the newest quarterly outcomes of ONGC.
For the March 2022 quarter, the corporate’s income rose 37% YoY. It additionally reported a 10% YoY improve in internet revenue because it benefitted from the surge in oil costs.
How shares of ONGC have carried out lately
Put up the announcement, ONGC’s share value fell over 13% to Rs 131. Over the past month, the inventory is down by virtually 16%.
Nonetheless, shares of the corporate are up by 5.8% within the final yr.
The corporate touched its 52-week excessive of Rs 194.9 on Eight March 2022 and 52-week low of Rs 108.5 on 23 August 2021.
At present the corporate is buying and selling at a PE (Worth to Incomes) a number of of three.three occasions. It’s buying and selling decrease than its trade PE of 5.26 occasions, and is at present undervalued.
ONGC is the largest publicly traded oil and gasoline manufacturing and exploration firm in India. The corporate produces 70% of India’s crude oil. That is virtually equal to 57% of the general demand within the nation.
It additionally produces 84% of India’s pure gasoline.
ONGC is below the possession of the Ministry of Petroleum and Pure Gasoline and the Authorities of India.
In 26 sedimentary basins in India, it’s engaged in hydrocarbon exploration and exploitation. It owns and operates over 11,000 km of pipelines within the nation.
To know extra about ONGC, try ONGC’s monetary factsheet.
You can even examine ONGC with its friends:
ONGC vs Oil India
ONGC vs Hindustan Oil Exploration
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