Jul 30, 2010

ONGC hits a month's low on poor Q1 show

State-owned Oil and Natural Gas Corp (ONGC) today tanked nearly 2 per cent to a month's low before making amarginal recovery in the early trade, a day after it reported a 24.5 per cent decline in its net profit for the quarter ended June 30.

Disappointed by the results, shares of ONGC plunged 1.72 per cent to a month low of ` 1,221.10 on Bombay Stock Exchange. However, the scrip made marginal recovery of 0.62 per cent later in the morning at ` 1,228.80.

On National Stock Exchange, too, the scrip slid by 1.49 per cent, to trade at ` 1,227.95.

"The results of the company are not that great, so the investors are booking profits. Such negative reaction is normal after results, especially, when the recent upside in the stock was already trapped by the investors," Unicon Financial Solutions CEO Gajendra Nagpal said.

Meanwhile, the broader benchmark, Sensex, too, was trading weak at 17,931.76, down 0.33 per cent from previous
close, on the poor quarterly show by companies including ONGC.

Yesterday, the oil and gas major had reported a net profit at ` 3,661.14 crore for the quarter ended June 30, against ` 4,847.92 crore in the same period previous fiscal, after its fuel subsidy payout jumped nearly 12-folds.

ONGC had paid ` 5,515 crore in April-June quarter towards fuel subsidies as against ` 429 crore in the year-ago period.

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