Ongc ru2 qfy2011-291010

Please refer to important disclosures at the end of this report 1
Y/E March (` cr) 2QFY11 1QFY11 % chg (qoq) 2QFY10 % chg (yoy)
Total Operating Income 18,430 13,823 33.3 15,338 20.2
EBITDA 11,322 8,193 38.2 8,981 26.1
EBITDA Margin (%) 61.4 59.3 2.2 58.6 2.9
Adj. PAT 5,389 3,661 47.2 5,090 5.9
Source: Company, Angel Research
ONGC’s 2QFY2011 numbers were in line with our expectation on top-line front, while
it was lower than our expectation on the bottom-line front on account of higher DD&A
expenditure. On account of likely fuel reforms going ahead, we recommend an
Accumulate on ONGC.
Higher-than-expected DD&A spoils the show; PAT comes below estimates: Operating
income during the quarter grew 20.2% yoy to `18,430cr (`15,338cr) primarily on
account of higher crude oil price and sales, and increase in the APM gas selling price
to US $4.2/mmbtu w.e.f June 2010 from US $1.8/mmbtu. Crude oil sales volumes
were up yoy to 5.91MMT (5.55MMT), whereas gas sales volume fell yoy to 5BCM
(5.2BCM). During the quarter, the company shared a subsidy burden of `3,019cr
(`2,630cr) as against our expectation of `3,300cr. Both gross and net realisations
were in line with our estimates. Net realisations stood at US $62.8/bbl (US $56.4/bbl).
OPM during the quarter improved by 288bp yoy to 61.4% (58.6%) on account of
higher net crude oil realisations aided by lower other operating expenses resulting in
EBITDA registering a growth of 26.1% yoy to `11,322cr (`8,981cr). Depreciation,
depletion and amortisation (DD&A) cost during the quarter increased by a substantial
86.8% yoy to `4,400cr (`2,356cr), which was higher than our estimate of `3,300cr.
Net profit during the quarter increased 5.9% yoy to `5,389cr (`5,090cr), which was
lower than our estimate of `6,198cr.
Outlook and Valuation: ONGC reported good set of numbers on the operating front
during the current quarter. However, on the bottom line front the performance was
dented on account of higher DD&A expenditure. We expect the trend of strong
operating performance to continue on account of impact of the gas price hike, decline
in subsidy burden with deregulation of petrol prices and increase in diesel prices.
Moreover, chances of further reforms in the oil sector are high owing to the expected
FPO by IOC and ONGC in the last quarter of the current fiscal. Following the recent
correction in the stock price, we recommend an Accumulate on the stock, with a
revised Target Price of `1,391(`1,356).
Key Financials (Consolidated)
Y/E March (` cr) FY2009 FY2010 FY2011E FY2012E
Net Sales 104,588 101,755 117,551 124,021
% chg 8.1 -2.7 15.5 5.5
Net Profits 19,795 19,404 24,469 26,332
% chg -0.4 -2.0 26.1 7.6
OPM (%) 41.3 44.2 44.9 46.1
EPS (`) 92.5 90.7 114.4 123.1
P/E (x) 14.1 14.4 11.4 10.6
P/BV (x) 3.0 2.8 2.4 2.1
RoE (%) 23.4 20.2 22.6 21.1
RoCE (%) 24.5 20.0 23.6 23.5
EV/Sales (x) 2.5 2.6 2.2 2.1
EV/EBITDA (x) 6.1 5.8 5.0 4.5
ACCUMULATE
CMP `1,303
Target Price `1,391
Investment Period 12 Months
Stock Info
Sector
Promoters 74.1
19.6
4.7
1.6
Abs. (%) 3m 1yr 3yr
Sensex 11.3 24.8 0.3
ONGC 4.9 11.8 5.2
BSE Sensex 20,032
Nifty
142255
Face Value (`) 10
Indian Public / Others
FII / NRIs / OCBs
Oil & Gas
Bloomberg Code ONGC@IN
Shareholding Pattern (%)
MF / Banks / Indian Fls
Market Cap (` cr) 278,748
Beta 0.6
6,018
Reuters Code ONGC.BO
52 Week High / Low 1,472/997
Avg. Daily Volume
Deepak Pareek
Tel: 022 - 4040 3800 Ext: 340
deepak.pareek@angeltrade.com
Amit Vora
Tel: 022 - 4040 3800 Ext: 322
amit.vora@angeltrade.com
ONGC
Performance Highlights
2QFY2011 Result Update | Oil & Gas
October 29, 2010

ONGC | 2QFY2011 Result Update
October 29, 2010 2
Exhibit 1: 2QFY2011 Performance
Y/E March (` cr) 2QFY2011 1QFY2011 % chg (qoq) 2QFY2010 % chg (yoy) 1HFY2011 1HFY2010 % chg (yoy)
Total Operating Income 18,430 13,823 33.3 15,338 20.2 32,253 30,474 5.8
Total operating expenditure 7,108 5,630 26.3 6,357 11.8 12,738 11,735 8.5
EBITDA 11,322 8,193 38.2 8,981 26.1 19,515 18,739 4.1
EBITDA Margin (%) 61.4 59.3 58.6 60.5 61.5
Other Income 906 407 122.5 993 (8.7) 1,313 1,781 (26.3)
Depreciation 4,400 3,114 41.3 2,356 86.8 7,514 5,535 35.8
Interest 1 3 (67.0) 4 (74.3) 4 10 (61.9)
PBT 7,827 5,483 42.7 7,614 2.8 13,310 14,975 (11.1)
PBT Margin (%) 42.5 39.7 49.6 41.3 49.1
Total Tax 2,438 1,822 33.8 2,525 (3.4) 4,260 5,037 (15.4)
% of PBT 31.2 33.2 33.2 32.0 33.6
PAT 5,389 3,661 47.2 5,090 5.9 9,050 9,938 (8.9)
Exceptional items - - - - -
Adj. PAT 5,389 3,661 47.2 5,090 5.9 9,050 9,938 (8.9)
PAT Margin (%) 29.2 26.5 33.2 28.1 32.6
Exhibit 2: Segmental Performance
Y/E March (` cr) 2QFY11 1QFY11 % chg (qoq) 2QFY10 % chg (yoy) 1HFY11 1HFY10 % chg (yoy)
Segment revenue
Offshore E&P 13,240 10,906 21.4 11,394 16.2 24,146 22,726 6.3
Onshore E&P 5,236 2,962 76.8 3,944 32.8 8,197 7,791 5.2
Unallocated - - - - -
Total revenue 18,476 13,868 33.2 15,338 20.5 32,344 30,517 6.0
EBIT
Offshore E&P 5,739 4,836 18.7 5,534 3.7 10,575 10,879 (2.8)
EBIT (%) 43.3 44.3 48.6 43.8 47.9
Onshore E&P 1,423 320 344.0 1,346 5.7 1,744 2,802 (37.8)
EBIT (%) 27.2 10.8 34.1 21.3 36.0
Unallocated - - - - -
Total EBIT 7,162 5,157 38.9 6,880 4.1 12,319 13,681 (10.0)
EBIT (%) 38.8 37.2 44.9 38.1 44.8
Less: Interest payment 1 3 (67.0) 4 (74.3) 4 10 (61.9)
Less: Other unallocable exp. net of income (666) (329) 102.3 (738) (9.7) (995) (1,304) (23.7)
PBT before extraordinary items 7,827 5,483 42.7 7,614 2.8 13,310 14,975 (11.1)
Extraordinary gain - - - - -
PBT 7,827 5,483 42.7 7,614 2.8 13,310 14,975 (11.1)

October 29, 2010 3
Exhibit 3: 1QFY2011 Actual v/s Estimates
(` cr) Estimates Actual Variation (%)
Total Operating Income 18,942 18,430 (2.7)
EBITDA 12,160 11,322 (6.9)
EBITDA Margin (%) 64.2 61.4 (2.8)
PBT 9,281 7,827 (15.7)
Adj. PAT 6,198 5,389 (13.1)
Net crude realisation at US $62.8/bbl: ONGC’s top-line registered a growth of
20.2% yoy to `18,430cr (`15,338cr), primarily on account of higher crude oil
price and sales and increase in APM gas selling price to US $4.2/mmbtu w.e.f
June, 2010 from US $1.8/mmbtu. ONGC’s top-line was in line with our
expectation of `18,942cr. ONGC’s gross realisations from crude oil sales stood at
US $79.2/bbl (US $62.8/bbl). During the quarter, the company shared subsidy
burden of `3,019cr (`2,630cr) as against our expectation of `3,300cr. Hence, net
realisations stood at US $62.8/bbl (US $56.4/bbl), up 11.2% yoy. Crude oil sales
volumes were up yoy to 5.91MMT (5.55MMT), whereas gas sales volume fell yoy
to 5BCM (5.2BCM). Crude oil sales volume increased 11.3% qoq to 5.91MMT
(5.31MMT) despite lower rate of 3.6% qoq increase in crude production to
6.85MMT (6.63MMT) as inventory built up, which happened in the last quarter due
to production disruption at the Numaligarh refinery and was sold during the
current quarter. Thus, the sales-to-production ratio improved during the quarter on
a qoq basis.
Exhibit 4: Crude realisations
-
20.0
40.0
60.0
80.0
100.0
120.0
140.0
1QFY09
2QFY09
3QFY09
4QFY09
1QFY10
2QFY10
3QFY10
4QFY10
1QFY11
2QFY11
US$/bbl
Gross Realisation Subsidy Net Realisation

October 29, 2010 4
Exhibit 5: Operating revenue growth trend
OPM expanded by 288bp yoy 61.4% : OPM during the quarter improved by
288bp yoy to 61.4% (58.6%) on account of the higher net crude oil realisations
aided by lower other operating expenses resulting in EBITDA registering a growth
of 26.1% yoy to `11,322cr (`8,981cr). Other operating expenses during the
quarter fell 7% yoy to `2,789cr (`3,000cr).
Exhibit 6: Operating performance
DD&A cost increases; Other income declines: Depreciation, depletion and
amortisation cost (DD&A) cost during the quarter increased by a substantial 86.8%
yoy to `4,400cr (`2,356cr), which was higher than our estimate of `3,300cr. This
was on account of significantly higher dry well written off during the quarter. It
increased by a whopping 372.7% yoy to `2,441cr (`655cr). Other income during
the quarter fell by 8.7% yoy to `906cr (`993cr).
(12.4)
22.9
13.2
(8.7)
20.2
(15.0)
(10.0)
(5.0)
-
5.0
10.0
15.0
20.0
25.0
-
3,000
6,000
9,000
12,000
15,000
18,000
21,000
2QFY10 3QFY10 4QFY10 1QFY11 2QFY11
(%)
(`cr)
Total operating revenues Total operating revenues growth (RHS)
58.6
61.0
58.9
59.3
61.4
57.0
58.0
59.0
60.0
61.0
62.0
-
2,000
4,000
6,000
8,000
10,000
12,000
(%)
(`cr)
Operating Profit Operating Margins (RHS)

October 29, 2010 5
PAT increases 5.9%: Net profit during the quarter increased 5.9% yoy to `5,389cr
(`5,090cr), which was lower than our estimate of `6,198cr. This was mainly due to
the higher-than-expected DD&A expenditure during the quarter.
Exhibit 7: PAT growth trend
Investment Arguments
Oil sector reforms provide re-rating trigger: ONGC’s stock performance is strongly
correlated with the reforms in the Indian oil and gas sector. The government has
recently increased the price of the APM gas and has brought it on par with the KG-
D6 gas prices. The increase in the APM gas prices has added around `18.9/share
on an annualised basis to ONGC’s earnings. ONGC is likely to report earnings
growth of more than 16.6% over FY2010-12E as against a decline of (1.2%) over
FY2008-10. Improved earnings trajectory is likely to provide the require boost to
development efforts in the form of EOR and IOR to increase the production of gas
from the ageing fields. Similarly, the reforms in diesel de-regulations and clarity
over the subsidy sharing mechanism are further likely to improve the profitability
and earnings visibility of ONGC.
Strong exploratory portfolio and improving business fundamental: ONGC is
India’s premier exploration company with 45% of the India’s NELP acreage
(prospective blocks). However, given the higher focus on the nomination block, the
company has not been able to deliver good exploratory results. However, we
expect the company’s focus to increase in the NELP block over the next 2-3 years.
ONGC has drilled only 13 NELP blocks and has established commercial prospects
in the same, which implies potential for future discoveries and reserve accretion.
Thus, increased focus on the NELP block could result in reserve and valuation
upside from current levels.
5.8
23.4
71.1
(24.5)
5.9
(40.0)
(20.0)
-
20.0
40.0
60.0
80.0
-
1,000
2,000
3,000
4,000
5,000
6,000
(%)
(`cr)
PAT PAT growth (RHS)

October 29, 2010 6
Outlook and Valuation
ONGC reported good set of numbers for operating performance during the
current quarter, however on the bottom-line front the performance was dented on
account of higher DD&A expenditure. We expect the trend of strong operating
performance to continue on account of impact of the gas price hike, coupled with
decline in subsidy burden with deregulation of petrol prices and increase in diesel
prices. Moreover, the chances of further reforms in the oil sector have strengthened
on account of expected FPO of IOC and ONGC in the last quarter of current
financial year.
The biggest variable impacting the company’s stock price is the announcement
associated with the subsidy sharing mechanism. ONGC’s stock price registered
gains post the announcement of petrol price deregulation. However, post the
announcement of the subsidy sharing mechanism some weakness has been
witnessed in the stock. The key rationale for the same being uncertainty related to
the subsidy-sharing mechanism. The government has yet again resorted to ad-hoc
subsidy sharing mechanism, wherein it is likely to bear 50% of the total subsidy
burden, while the upstream companies would bear 33%. However, there is not
clarity over the sharing of the balance 17% subsidy burden. If the government were
to increase the upstream share of the subsidy burden, it could adversely impact
ONGC. Thus, there remains some uncertainty over the subsidy sharing
mechanism. However, given the proposed FPO we see limited risk on account of
higher subsidy during the fiscal.
However, despite the uncertainties on the near-term subsidy sharing mechanism,
we believe that given the government’s intent to gradually deregulate the diesel
prices, coupled with the increase in the APM gas price, the risk-reward ratio is now
favourable with limited downside from current levels. At `1,303, the stock is
currently trading at 10.6x FY2012E EPS of `123.1. We have valued the company
at 10x FY2012E EPS and added the value of cash and listed investments, thereby
arriving at a revised Target Price of `1,391 (` 1,356). We recommend Accumulate
on the stock.
Exhibit 8: SOTP Valuation Summary
Y/E March Value (` cr) Value per share (`)
Value of core business(10x FY2012E EPS) 263,322 1,231
Investments
GAIL (10% discount to TP) 2,895 14
IOC (10% discount to CMP) 8,261 39
Petronet LNG (10% discount to TP) 1,021 5
Cash in hand ( net of debt) (FY2012E) 22,074 103
Total value of cash and investments 34,251 160
SOTP Value 331,823 1,391

October 29, 2010 7
Exhibit 9: Key Assumptions
Particulars FY2011E FY2012E
Standalone Gross realisations (US $/bbl) 76.9 76.9
Standalone Net realisations (US $/bbl) 55.4 57.8
Sale of crude oil (MMT) 25.9 27.3
Natural gas Production (BCM) 25.9 26.0
OVL (O+OEG sales) (MMT) 8.4 8.7
GRMs for MRPL (US $/bbl) 4.0 4.5
Exhibit 10: Angel EPS forecast v/s consensus
Angel Forecast Bloomberg Consensus Variation (%)
FY2011E 114.4 115.1 (0.6)
FY2012E 123.1 126.5 (2.7)
Exhibit 11: Recommendation Summary
Company Reco CMP (`)
Target
Price (`)
Upside
(%)
Mkt Cap
(` cr)
FY2012E
P/BV (x)
FY2012E
P/E (x)
FY09-12E
CAGR in
EPS (%)
FY2012E
RoCE (%)
FY2012E
RoE (%)
Cairn India Neutral 321 - (1.8) 60,851 1.6 7.0 121.7 25.9 23.0
GAIL Accumulate 490 534 8.9 62,174 2.7 14.7 14.6 19.2 20.0
GSPL Accumulate 112 120 6.7 6,325 2.8 13.3 56.7 19.9 22.9
Gujarat Gas Neutral 381 - 2.8 4,890 4.5 17.5 20.2 31.2 27.8
IGL Accumulate 328 345 5.0 4,598 3.9 15.5 19.7 31.0 27.4
ONGC Accumulate 1,303 1,391 6.8 278,748 2.1 10.6 10.0 23.5 21.1
Petronet LNG Accumulate 111 121 9.0 8,328 2.7 13.1 6.9 16.1 22.4
RIL Buy 1,096 1,260 15.0 358,501 1.9 12.6 24.0 13.7 16.4
Shiv-Vani Oil Buy 426 539 26.4 1,976 1.2 7.9 14.5 14.0 18.4

October 29, 2010 8
Exhibit 12: One-year forward P/E band
Exhibit 13: Premium/Discount in ONGC (P/E) v/s Sensex (P/E)
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
Apr-04
Oct-04
Apr-05
Oct-05
Apr-06
Oct-06
Apr-07
Oct-07
Apr-08
Oct-08
Apr-09
Oct-09
Apr-10
Oct-10
Shareprice(`)
Share Price 7x 9x 11x 13x 15x
(60)
(50)
(40)
(30)
(20)
(10)
0
Apr-04
Oct-04
Apr-05
Oct-05
Apr-06
Oct-06
Apr-07
Oct-07
Apr-08
Oct-08
Apr-09
Oct-09
Apr-10
Oct-10
(%)
Prem/Disc to Sensex Historic Avg Disc

October 29, 2010 9
Profit & Loss Statement (Consolidated)
Y/E March (` cr) FY2007 FY2008 FY2009 FY2010 FY2011E FY2012E
Total operating income 82,262 96,782 104,588 101,755 117,551 124,021
% chg 17.7 8.1 (2.7) 15.5 5.5
Total Expenditure 46,067 55,527 61,364 56,805 64,762 66,860
Net Raw Materials 18,263 25,070 28,975 25,339 27,381 26,181
Other Mfg costs 17,179 18,419 17,678 16,321 21,277 22,944
Personnel 2,380 1,328 1,162 1,407 1,411 1,860
Other 8,245 10,710 13,549 13,738 14,694 15,875
EBITDA 36,195 41,255 43,225 44,949 52,789 57,161
% chg 14.0 4.8 4.0 17.4 8.3
(% of Net Sales) 44.0 42.6 41.3 44.2 44.9 46.1
Depreciation& Amortisation 11,968 13,888 15,430 18,719 18,549 18,885
EBIT 24,227 27,367 27,794 26,230 34,240 38,276
% chg 13.0 1.6 (5.6) 30.5 11.8
(% of Net Sales) 29.5 28.3 26.6 25.8 29.1 30.9
Interest & other Charges 418 894 1,774 1,102 296 349
Other Income 4,739 4,541 5,072 5,273 4,200 3,100
(% of PBT) 16.6 14.6 16.3 17.3 11.0 7.6
Recurring PBT 28,548 31,014 31,093 30,401 38,144 41,028
% chg 8.6 0.3 (2.2) 25.5 7.6
Adj. related to prior period
(Net)
1,275 93 (11) (40) - -
Extraordinary Expense/(Inc.) (475) - (66) - - -
PBT (reported) 27,747 30,921 31,169 30,441 38,144 41,028
Tax 9,845 10,700 11,009 10,714 13,265 14,295
(% of PBT) 35.5 34.6 35.3 35.2 34.8 34.8
PAT (reported) 17,902 20,221 20,160 19,728 24,879 26,732
Add: Share of earnings of
associate
10.2 2.1 9.9 7.8 9.9 9.9
Less: Minority interest (MI) 142 351 375 332 420 410
PAT after MI (reported) 17,770 19,872 19,795 19,404 24,469 26,332
ADJ. PAT 18,245 19,872 19,861 19,404 24,469 26,332
% chg 8.9 (0.1) (2.3) 26.1 7.6
(% of Net Sales) 22.2 20.5 19.0 19.1 20.8 21.2
Basic EPS (`) 83.1 92.9 92.5 90.7 114.4 123.1
Fully Diluted EPS (`) 83.1 92.9 92.5 90.7 114.4 123.1
% chg 11.8 (0.4) (2.0) 26.1 7.6

October 29, 2010 10
Balance Sheet (Consolidated)
SOURCES OF FUNDS
Equity Share Capital 2,139 2,139 2,139 2,139 2,139 2,139
Preference Capital - - - - - -
Reserves& Surplus 64,575 75,948 90,085 99,268 114,863 132,186
Shareholders Funds 66,714 78,087 92,224 101,407 117,001 134,325
Minority Interest 832 1,145 1,411 1,643 2,053 2,453
Total Loans 1,601 944 6,559 6,267 7,400 7,750
Deferred Tax Liability 8,112 8,738 9,223 10,291 10,591 10,941
Liability for abandonment cost 15,186 12,932 17,145 17,459 17,459 17,459
Total Liabilities 92,444 101,846 126,562 137,067 154,505 172,929
APPLICATION OF FUNDS
Gross Block 137,145 149,493 169,748 193,300 226,404 248,404
Less: Acc. Depreciation 83,436 93,825 105,955 117,757 126,906 136,891
Net Block 53,710 55,668 63,794 75,543 99,498 111,513
Capital Work-in-Progress 11,030 14,423 24,758 25,616 14,500 14,000
Goodwill 3,062 2,578 11,404 9,539 9,539 9,539
Investments 3,583 4,482 3,480 5,159 5,159 5,159
Current Assets 38,840 47,534 50,715 50,566 51,966 58,490
Cash 20,676 25,056 22,596 22,384 24,158 29,824
Loans & Advances 6,736 7,068 13,264 12,057 12,057 12,057
Other 11,429 15,411 14,855 16,125 15,752 16,609
Current liabilities 18,296 23,513 28,239 30,198 26,998 26,613
Net Current Assets 20,545 24,022 22,476 20,369 24,968 31,877
Mis. Exp. not written off 514 674 651 841 841 841
Total Assets 92,444 101,846 126,562 137,067 154,505 172,929

October 29, 2010 11
Cash Flow Statement (Consolidated)
Profit before tax 28,548 31,014 31,093 30,441 38,144 41,028
Depreciation 7,864 9,078 8,779 8,863 9,149 9,985
(Incr)/ Decr in Misc Exp (148) (180) 1 (264) - -
Change in Working Capital 2,689 2,415 2,355 (719) (2,801) (1,492)
Less: Other income (2,115) (2,903) (3,238) (2,300) (4,200) (3,100)
Direct taxes paid (8,520) (10,508) (10,244) (7,748) (12,965) (13,945)
Cash Flow from Operations 28,318 28,915 28,746 28,272 27,327 32,475
(Inc.)/ Dec. in Fixed Assets (13,566) (16,814) (21,639) (21,253) (21,988) (21,500)
(Inc.)/ Dec. in Investments (2,212) (1,260) 902 (2,249) - -
(Inc.)/ Dec. in loans and adv. 35 (1) (1,951) 532 - -
Other income 1,356 2,078 3,365 2,673 4,200 3,100
Cash Flow from Investing (14,387) (15,996) (19,323) (20,297) (17,788) (18,400)
Issue of Equity 703 166 - 287 - -
Inc./(Dec.) in loans (661) (598) 4,968 (304) 1,133 350
Dividend Paid (Incl. Tax) (7,695) (7,822) (8,103) (8,078) (8,784) (8,758)
Others 5,291 (285) (8,748) (92) (115) -
Cash Flow from Financing (2,361) (8,538) (11,883) (8,187) (7,766) (8,408)
Inc./(Dec.) in Cash 11,570 4,380 (2,460) (211) 1,774 5,666
Opening Cash balances 9,106 20,676 25,056 22,596 22,384 24,158
Closing Cash balances 20,676 25,056 22,596 22,384 24,158 29,824

October 29, 2010 12
Key Ratios
Y/E March FY2007 FY2008 FY2009 FY2010 FY2011E FY2012E
Valuation Ratio (x)
P/E (on FDEPS) 15.7 14.0 14.1 14.4 11.4 10.6
P/CEPS 11.2 9.6 9.3 8.7 7.5 7.1
P/BV 4.2 3.6 3.0 2.8 2.4 2.1
Dividend yield (%) 2.4 2.5 2.5 2.5 2.7 2.8
EV/Sales 3.2 2.6 2.5 2.6 2.2 2.1
EV/EBITDA 7.2 6.2 6.1 5.8 5.0 4.5
EV/Total Assets 2.8 2.5 2.1 1.9 1.7 1.5
Per Share Data (`)
EPS (Basic) 83.1 92.9 92.5 90.7 114.4 123.1
EPS (fully diluted) 83.1 92.9 92.5 90.7 114.4 123.1
Cash EPS 117 135 140 149 174 184
DPS 31 32 32 33 35 36
Book Value 310 362 428 470 543 624
Dupont Analysis (%)
EBIT margin 29.5 28.3 26.6 25.8 29.1 30.9
Tax retention ratio 65.7 65.7 64.8 64.8 65.2 65.2
Asset turnover (x) 1.2 1.3 1.2 0.9 1.0 0.9
ROIC (Post-tax) 22.5 24.4 20.1 15.6 18.4 18.4
Cost of Debt (Post Tax) - - - - - -
Leverage (x) - - - - - -
Operating ROE 22.5 24.4 20.1 15.6 18.4 18.4
Returns (%)
ROCE (Pre-tax) 28.3 28.3 24.5 20.0 23.6 23.5
Angel ROIC (Pre-tax) 40.8 44.9 39.6 31.5 33.7 31.5
ROE 29.0 27.7 23.4 20.2 22.6 21.1
Turnover ratios (x)
Asset Turnover (Gross Block) 0.6 6.8 6.6 5.6 5.6 5.2
Inventory / Sales (days) 24 25 24 27 23 20
Receivables (days) 21 22 25 26 24 25
Payables (days) 89 99 109 137 119 105
WC cycle (ex-cash) (days) 18 (2) (2) (4) (2) 4
Solvency ratios (x)
Net debt to equity (0.3) (0.3) (0.2) (0.2) (0.1) (0.2)
Net debt to EBITDA (0.5) (0.6) (0.4) (0.4) (0.3) (0.4)
Interest Coverage (EBIT/Interest) 58.0 30.6 15.7 23.8 115.7 109.8

October 29, 2010 13
Research Team Tel: 022 - 4040 3800 E-mail: research@angeltrade.com Website: www.angeltrade.com
DISCLAIMER
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment
decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make
such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies
referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and
risks of such an investment.
Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make
investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this
document are those of the analyst, and the company may or may not subscribe to all the views expressed within.
Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and
trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's
fundamentals.
The information in this document has been printed on the basis of publicly available information, internal data and other reliable
sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this
document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way
responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report.
Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify,
nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While
Angel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory,
compliance, or other reasons that prevent us from doing so.
This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced,
redistributed or passed on, directly or indirectly.
Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or
other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in
the past.
Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in
connection with the use of this information.
Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please
refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and
its affiliates may have investment positions in the stocks recommended in this report.
Disclosure of Interest Statement ONGC
1. Analyst ownership of the stock No
2. Angel and its Group companies ownership of the stock No
3. Angel and its Group companies' Directors ownership of the stock No
4. Broking relationship with company covered No
Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors.
Ratings (Returns) : Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
Reduce (-5% to 15%) Sell (< -15%)

Ongc ru2 qfy2011-291010

More Related Content

What's hot

Similar to Ongc ru2 qfy2011-291010

More from Angel Broking

Recently uploaded

Ongc ru2 qfy2011-291010