We have revise down our June’15 target price by 13% to Rs 262/share for Oil and Gas Development Company (OGDC) , where we incorporate new Arab light assumption of $77/barerel for FY15 & $65/barrel for FY16 onwards and 50bps decline in discount rate.
The recent bearish trend of oil has pressed the share price which provides opportunity to accumulate. At yesterday closing price of Rs 204.61/share, the scrip is trading at discount of 28% to our June’15 target price of Rs 262/share.

PAT down in 1QFY15
OGDC earnings drop by 16% YoY to Rs 28.31 billion (EPS: Rs 6.58) during 1QFY15 against Rs 33.58 billion (EPS: Rs 7.81) in the respective period of last year. This miserable performance mainly caused by lower oil prices which declined by 4.4%, reduction
in other income owing to lower exchange gains and sharp rise in exploration expenditure by 92% on account of 3 dry wells. Besides that company’s has announced a first interim dividend of Rs 2.50/share.


Azee Research