Emkay Global Financial Services has maintained 'Buy' on Oil & Natural Gas Corporation (ONGC) after the announcement of company's first quarter results. The stock broker fixed price target to Rs 338.

Commenting on the results Emkay Global said, ''The company's results came in-line with our estimates with PAT at Rs 54.6 billion (our estimate of Rs 54.6 billion) and EBITDA stood at Rs 105.8 billion. Sequential improvement in PAT is mainly attributable to higher Net realization coupled with lower exploration cost. Crude oil production improved marginally by 0.2% qoq to 6.14mmt, and Gas volume remains flat at 5.8bcm. Net realization for the quarter stood at USD 58.9 a bbl against USD 55.6 and USD 47 a bbl on qoq and yoy basis. ONGC’s share of upstream under recovery towards OMC’s stood at Rs 11.3 billion for 1QFY16. ONGC’s share in upstream under recovery stood at 87.14%.''

Commenting on the investment rationale, the stock broker said, ''Given the weaker crude oil price outlook stock would remain under pressure in near term.  Thus, we have tone down our EPS estimates by 27.1% and 25.9% for FY16 and FY17E and TP to Rs 338 (Rs 398 earlier) factoring lower crude oil price of USD 60 and 65 bbl for FY16/17E. Clear subsidy sharing formula and expected reforms in Kerosene could be the only driver of re-rating going ahead. Currently, the stock trades at 10.4x FY17EPS and 1.4x P/BV, maintain Buy.''

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