Motilal Oswal - MOSL: Morning India (9/May/17)-1. ONGC; 2. Economy (FoE); 3. Auto; 4. Technology; 5. Bharti Infratel; 6. ABB; 7. Canara Bank; 8. Union Bank

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Motilal Oswal

Team Research

MOSL: Morning India (9/May/17)-1. ONGC; 2. Economy (FoE); 3. Auto; 4. Technology; 5. Bharti Infratel; 6. ABB; 7. Canara Bank; 8. Union Bank

â€‹MOrning India (9/May/17): 1. ONGC; 2. Economy (FoE); 3. Auto; 4. Technology; 5. Bharti Infratel; 6. ABB; 7. Canara Bank; 8. Union Bank; 9. Emami; 10. Equitas Holdings

Todayâ€™s top research idea

ONGC: Crude price dip an opportunity to buy
Oil prices have declined to five months low due to concern on over-supply led by the US. However, if OPEC & non-OPEC continue their production cuts, demand-supply is going to be tighter in H2CY17. We expect oil prices to rebound to 55-60/bbl.
The company has brought about cost-efficiencies through reduced work-overs and water injection. Cost-efficiencies, marginal oil and 10-15% gas production each year is likely to rerate the stock.
For USD5/bbl change in oil price, we expect EPS change of 10%. Gas price also appears to have bottomed out. For every change of USD1/mmBtu in gas price realization, we expect change of ~11% in EPS.
At USD55/60/bbl, valuing the company at 10x FY19 EPS, we recommend Buy with target of INR233.

09/05/2017 34 EN

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Motilal Oswal

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MOSL: Morning India (9/May/17)-1. ONGC; 2. Economy (FoE); 3. Auto; 4. Technology; 5. Bharti Infratel; 6. ABB; 7. Canara Bank; 8. Union Bank

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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