ONGC's stock rebounds over 1%. But is it still too cheap?

ONGC (Oil and Natural Gas Corporation) isn’t the kind of stock that usually sets Dalal Street buzzing. But today (June 16, 2025), the oil explorer’s shares quietly climbed back towards Rs 252, catching the eye of bargain hunters and income-seekers alike.

So, what’s moving the stock?

Here’s why investors are tuning back in:

• Valuation reset: ONGC’s stock has lagged despite solid earnings. It trades at a P/E of around 8.7 and a P/B of roughly 1. That’s a steep discount to industry averages.
• Crude comeback: Global oil prices have bounced back on supply concerns and geopolitical noise. For ONGC, that usually means stronger margins.
• Yield magnet: A nearly 5 per cent dividend yield makes it a top pick for investors looking for steady income.
• Underrated metrics: ONGC isn’t just about dividends. Return on equity is a solid 14-18 per cent, and its balance sheet is built like a tank.

What ONGC does

ONGC is India’s largest producer of crude oil and natural gas. It supplies about 70 per cent of the country’s domestic crude and 80 per cent of its gas. The company operates offshore and onshore fields, and also has stakes in refining, petrochemicals and renewable energy.

Below is a table showing the company’s fundamentals.

Value Research Online ratings

• Quality: 6/10
• Growth: 6/10
• Valuation: 8/10
• Momentum: 3/10
• Overall: 4/5

The takeaway

There are not many stocks offering a 5 per cent yield, strong earnings and valuation comfort in today’s market. ONGC is one of them. However, it’s not without its risks. Momentum is weak and PSU stocks often take their time. But for long-term investors who like buying strength at a discount, ONGC may still be worth a look.

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Disclaimer: This is not a stock recommendation. This story was created with the assistance of artificial intelligence and is intended for informational purposes only. Please take it with a pinch of salt and do your own research or consult a financial advisor before making investment decisions.