Stock to Sell: This PSU oil stock plunges to seven-month low; analysts warn of major downside; do you own?

Stock to Sell: Shares of Oil and Natural Gas Corp (ONGC) slipped 3 per cent to a seven-month low on December 15, emerging as the top loser on the Nifty 50 index. At 13:20 pm IST, ONGC was trading at Rs 233 apiece on the NSE, down 2 per cent, extending its decline to the fourth consecutive session. Over 8.5 million shares had changed hands by midday, nearly double Friday’s trading volume.

Axis Capital initiates 'Sell' on ONGC

The fall comes after Axis Capital initiated coverage on ONGC with a ‘Sell’ rating, citing the state-run firm’s declining oil production and a muted crude price outlook. The domestic brokerage set a price target of Rs 205, implying a potential downside of up to 12 per cent from the current market price. This marks ONGC’s first ‘Sell’ rating since May, with Axis’s target being the lowest since HSBC had set Rs 200.

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Axis Capital highlighted production challenges for ONGC, pointing to ageing oil fields and an expected Brent crude price of $65–66 per barrel over FY26–27, which could weigh on the company’s margins.

Despite the bearish outlook, global oil prices rose on Monday, with Brent crude futures up 0.54 per cent at $61.45 a barrel and U.S. WTI crude up 0.54 per cent at $57.75 a barrel, as supply disruptions linked to escalating U.S.-Venezuela tensions outweighed oversupply concerns and a potential Russia-Ukraine peace deal. Both contracts had dropped over 4 per cent last week on expectations of a 2026 supply surplus.

ONGC Q2FY26 result highlights

Oil and Natural Gas Corp (ONGC) reported a consolidated net profit of Rs 12,615 crore for Q2 FY26, up 28.2 per cent year-on-year (YoY). Its standalone net profit came in at Rs 9,848 crore, down 17.8 per cent YoY, impacted by lower crude prices. The company declared an interim dividend of Rs 6 per share. Key operational highlights included a 1.2 per cent rise in standalone crude oil production and a strong contribution from New Well Gas (NWG), which accounted for over 21 per cent of total gas revenue.