loading
loading
Kotak Institutional Equities maintains a BUY on ONGC with a fair value of ₹355 and a SELL on Oil India with a fair value of ₹360. The brokerage raised its FY27 crude oil price assumption to $90 per barrel from $85, while retaining its FY28 and long-term assumptions at $75 per barrel. Kotak prefers ONGC over Oil India, citing a stronger medium-term production outlook, better realisations, rising contribution from new fields and relatively inexpensive valuations. Kotak Institutional Equities said the West Asia conflict has resulted in one of the largest oil supply disruptions in recent history, with the disruption persisting for seven months and limited visibility on a return to normalcy. However, the brokerage noted that global oil markets have remained resilient and largely well managed. The brokerage said crude flows through the Strait of Hormuz have improved, reaching around 13 million barrels per day in September 2026, the highest level since the conflict began. While Brent crude averaged nearly $100 a barrel in the first half of FY27, Kotak expects prices to ease in the second half, assuming hostilities do not intensify and supply flows continue to normalise. Against this backdrop, Kotak raised its FY27 Brent crude assumption to $90 a barrel from $85, while retaining its FY28 and long-term assumption at $75 a barrel. Kotak said ONGC remains its preferred upstream play, despite recent production weakness and challenges at KG-98/2. The brokerage expects the company's outlook to improve, supported by rising gas production from new fields and higher gas realisations from NWG. More importantly, Kotak highlighted ONGC's technical service provider (TSP) agreement with BP for its Western Offshore assets, which account for around 70% of production. The agreement is expected to strengthen ONGC's medium-term production outlook. While ONGC's base case assumes a 5.5% annual production decline, the TSP targets broadly flat production over the next decade, according to the brokerage. In contrast, Kotak expects Oil India's limited reserves to result in a decline in oil production after its near-term ramp-up. Kotak also pointed to a more favourable policy environment for upstream companies following reforms, including amendments to the ORDA Act. According to the brokerage, these changes allow upstream players to benefit more directly from higher oil prices. It also highlighted royalty reforms and the Samudra Manthan initiative as additional supportive measures. For new-well gas, pricing at 12% of Brent was described as favourable and broadly comparable with imported LNG. Kotak raised its ONGC FY27 earnings estimate by around 7%, while changes to its FY28/FY29 estimates were around 2%. For Oil India, the brokerage cut its EPS estimates by 2.5–3.5% for FY28–FY29, mainly due to a moderation in its gas volume assumptions. It maintained BUY on ONGC, with a revised fair value of ₹355, down from ₹360 earlier. For Oil India, Kotak retained its SELL rating, with a revised fair value of ₹360, compared with ₹370 earlier. Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions. Dhanya Nagasundaram works as a Content Producer at LiveMint, specializing in news related to financial markets, stocks, and business. With over eight years of experience in journalism and content creation, she has honed her skills in data-driven reporting and market analysis. Her focus is on monitoring stock trends, initial public offerings (IPOs), corporate news, policy shifts, and larger economic trends that affect investors and market players. <br><br> At LiveMint, Dhanya consistently writes and produces articles that make complex financial topics accessible to readers. She keeps a close eye on equity markets, commodities, and macroeconomic indicators, assisting audiences in comprehending how global and domestic events influence investment perspectives. Her stories frequently underscore emerging trends within sectors, the IPO market, company earnings results, and market strategies pertinent to both retail and institutional investors. <br><br> Before her tenure at LiveMint, Dhanya accumulated a wealth of professional experience at various companies, including MintGenie, Informist, Cogenics, Chary Publications, KPMG, and the Royal Bank of Scotland. These positions allowed her to establish a solid foundation in financial research, reporting, and content creation. <br><br> Throughout her career, she has explored numerous subjects such as trading strategies, commodities, IPOs, wealth generation, corporate profits, and macroeconomic indicators. Her background in both financial journalism and corporate settings has given her the ability to tackle stories with analytical rigor while ensuring clarity for her audience. Through her contributions, Dhanya strives to deliver insightful, trustworthy, and investor-centric financial content. Catch all the Business News , Market News , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates. Oops! Looks like you have exceeded the limit to bookmark the image. Remove some to bookmark this image.
document fetched 2026-10-03 02:56 · canonical https://livemint.com/market/stock-market-news/buy-ongc-sell-oil-india-kotak-raises-fy27-oil-price-assumption-to-90-11790915589820.html