Motilal Oswal - MOSL: Morning India (03/July/17)-1. ONGC-2. Hero Motocorp-3. Auto (Volume Nos.) 4. EcoScope

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Motilal Oswal

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MOSL: Morning India (03/July/17)-1. ONGC-2. Hero Motocorp-3. Auto (Volume Nos.) 4. EcoScope

â€‹MOrning India (03/July/17): 1. ONGC; 2. Hero Motocorp; 3. Auto (Volume Nos.); 4. EcoScope

Todayâ€™s top research idea

ONGC: Lowering crude oil price estimates; Stock price correction provides an opportunity to buy

Despite almost full compliance by OPEC/non-OPEC countries in terms of production cuts, oil price declined recently, primarily due to normalization of production from Libya and Nigeria. However, as oil consumption continues to grow and production cuts remain, we would see oil at USD50-55/bbl. This is slightly below our earlier forecast of USD55-60/bbl due to the recent spurt in production.

ONGC has brought down its production cost from USD7.4/boe in FY16 to USD6.3/boe in FY17, which we believe is sustainable. Additionally, gas production growth of 10-15% annually and an increase in gas price realization are expected to boost EPS growth.

We reiterate Buy with a revised target price of INR195, based on 10x FY19E EPS.

Piping hot news

GST: Businesses race to adapt to new tax regime

The weekend following the Saturday midnight rollout of goods and services tax (GST) witnessed many companies announcing price cuts and some pausing market operations to update their systems even as wholesalers were seen rushing to upgrade software to comply with the requirements of the new indirect tax system.

03/07/2017 25 EN

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MOSL: Morning India (03/July/17)-1. ONGC-2. Hero Motocorp-3. Auto (Volume Nos.) 4. EcoScope

MOSL : HOME FIRST FINANCE COMPANY: Earnings in-line with sustained improvement in asset quality

MOSL : SHOPPERS STOP: Ticking the right boxes

MOSL : ERIS LIFESCIENCES: Enhanced efforts toward product launch-related activities

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