On 1 July 2022, Indian share markets fell for the 3rd working day in a row.
Amid this decline, shares of oil & gas businesses also fell. All the gains produced by strength companies eroded in a day.
Shares of Reliance fell 8% while shares of Oil India fell by a whopping 15%.
Amid these shares was also ONGC. The firm’s shares fell by 13% in a one day.
So, what led to this downfall?
On 1 July 2022, the Authorities of India announced that it would impose taxes on the export of petrol, diesel, and jet gasoline shipped overseas by Indian corporations.
It would levy a tax of Rs 6 for every litre on exports of petrol and ATF (Aviation Turbine Gas) and a tax of Rs 13 for each litre on the export of diesel in the nation.
This stage was taken to relieve the shortage of gas in India.
You see, quite a few pieces of India, these kinds of as Gujarat, Rajasthan, and Madhya Pradesh, have been out of gasoline for months as refineries have amplified their exports to Europe and the US amid the Russia-Ukraine war.
This has led to a shortage in Indian markets.
The government then further announced a windfall tax on oil-producing corporations. A windfall tax is a higher tax levied on the gains of certain organizations.
The authorities claimed it would employ an more cess of Rs 23,230 per barrel on domestic crude oil creation.
Domestic suppliers of crude oil have been selling crude oil at intercontinental costs. This has led to a windfall attain by the producers thanks to an enhance in realizations.
This can be viewed in the most recent quarterly benefits of ONGC.
For the March 2022 quarter, the firm’s revenue rose 37% YoY. It also noted a 10% YoY maximize in net income as it benefitted from the surge in oil charges.
How shares of ONGC have done not long ago
Submit the announcement, ONGC’s share price fell above 13% to Rs 131. More than the very last thirty day period, the inventory is down by nearly 16%.
However, shares of the corporation are up by 5.8% in the final calendar year.
The company touched its 52-week substantial of Rs 194.9 on 8 March 2022 and 52-week low of Rs 108.5 on 23 August 2021.
At this time the enterprise is trading at a PE (Price tag to Earning) multiple of 3.3 occasions. It is investing lower than its field PE of 5.26 instances, and is at the moment undervalued.
ONGC is the greatest publicly traded oil and gas generation and exploration firm in India. The firm makes 70% of India’s crude oil. This is just about equal to 57% of the overall desire in the place.
It also makes 84% of India’s organic gasoline.
ONGC is less than the possession of the Ministry of Petroleum and Purely natural Fuel and the Government of India.
In 26 sedimentary basins in India, it is engaged in hydrocarbon exploration and exploitation. It owns and operates above 11,000 km of pipelines in the place.
To know much more about ONGC, verify out ONGC’s monetary factsheet.
You can also look at ONGC with its friends:
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