Oil And Natural Gas Corporation Ltd., incorporated in the year 1993, is a Large Cap company (having a market cap of Rs 150208.53 Crore) operating in Gas & Petroleum sector.
Financials
For the quarter ended 31-03-2021, the company reported a Consolidated Total Income of Rs 118206.16 Crore, up 15.42 % from last quarter Total Income of Rs 102416.51 Crore and up 9.44 % from last year same quarter Total Income of Rs 108014.32 Crore. Company reported net profit after tax of Rs 10267.26 Crore in latest quarter.
Investment Rationale
The brokerage expects loan book growth to remain muted even in FY22E. Improvement in asset quality is encouraging as GS 3 fell below 4% after remaining sticky between 4% and 4.3% for the last seven quarters. The brokerage sees the efforts put in by REPCO to improve collections and achieve resolutions/upgrades in GS 3 reflecting in improved asset quality. Given the investments being made by REPCO in digitization, the brokerage expects it to benefit from productivity improvements and structural enhancements across different stages of the loan lifecycle. Availability of low-cost NHB borrowings will not sustain indefinitely. It expects further benefits from lower incremental cost of borrowings to be limited. It estimates a 12% PAT CAGR over FY21-24E. REPCO trades at 0.85x FY23E P/BV, which is undemanding. It has a Buy rating on the stock with a TP of INR440 (1x FY23E PBVPS).
Promoter/FII Holdings
Promoters held 60.4 per cent stake in the company as of March 31, 2021, while FIIs held 8.1 per cent, DIIs 17.5 per cent and public and others 11.1 per cent.
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