Shares of the upstream oil company Oil and Natural Gas Corporation gained in early trade by  as much as  as 1.6 per cent to day's high at Rs 287.55 Morgan Stanley continues with its overweight view on the stock for a target of Rs 304 per share. This implies a decent upside of 7 per cent over the previous close.

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The company's outperformance is likely to continue with improved capital allocation & stable regulations supporting stable 18-20% ROE, the brokerage said.

The slow ramp-up in domestic production by the end of 2024 is well flagged with upside from improving earnings & FCF (free cash flow) across downstream subs.

The company via a filing informed in March end that  ICRA Limited has withdrawn the long term rating of [ICRA] AAA (Stable) assigned to Rs. 2,640 Crore Non-Convertible Debentures (NCDs) of Oil and Natural Gas Corporation Limited (ONGC), in accordance with ICRA’s policy on withdrawal of Credit rating, as these NCDs have been redeemed and no amount is outstanding against the said instruments.

The company in the quarter ending December saw net sales of Rs 165569.06 crore, while PAT also logged a 8 per cent decline to Rs 10748.46 crore YoY.

Earlier, Motilal Oswal in its report held that high crude prices bring limited earnings surprises for ONGC and Oil India, given their net realization remains capped at ~USD75/bbl. And even despite this brokerage continues with its buy rating on the counter with a target of Rs 315.