ONGC declared its Q1FY17 results, which were above our estimates on the profitability front. The topline declined 22.1% YoY to | 17784.8 crore and came in above our estimate of | 18296.3 crore. The reported PAT declined 25% YoY to | 4232.5 crore and came in above our estimate of | 3306.9 crore, mainly due to lower than estimated operating expenses • The net realisation came in marginally higher at $46.1/bbl than estimated $45.8/bbl. There was nil subsidy during the quarter.

ICICI Securities Limited have assumed the above subsidy sharing mechanism for the long term to arrive at a target price of | 240/share with EPS of | 18.7 and | 19.1 for FY17E and FY18E, respectively assuming Brent crude price at US$45/bbl. However, if Brent crude price increases to US$ 50/bbl for the remaining period of FY17E and FY18E, ONGC’s target price would change to | 264/share. They have a HOLD rating on the stock at the current levels.