Brokerage firm Jefferies reiterated its “buy” recommendation on shares of Oil & Natural Gas Corporation Ltd. (ONGC), the state-run upstream oil explorer on Friday, March 28, after hosting the management in the US post a roadshow.

Jefferies has a price target of ₹375 on the stock, which implies a potential upside of 56% from Thursday’s closing levels. This is the third highest price target on ONGC, after Morgan Stanley and Anand Rathi Securities.

There are five key factors that could contribute to this upside, as per the Jefferies note:

First, the management is targeting a 5% to 6% growth in annual production over financial year 2026-2028 on the bank of ramp up in crude and gas production from the Krishna-Godavari basin by mid-2025, new development at Daman and at DSF2.

Second, ONGC has contracted BP as the technical services provider on its field. Over a 10-year contract, BP is expecting to increasing crude oil and gas recovery by 44% and 90% over ONGC’s assumed recovery estimates, according to Jefferies. This could lead to ONGC’s production to grow at a Compounded Annual Growth Rate (CAGR) between 10% to 12% over financial year 2026-2030. “We have not built this into our estimates,” the note said.

ONGC is expecting nearly 20% of gas production to be eligible for new well gas prices in financial year 2026, which can rise to nearly 100% by 2030, according to the brokerage.

The management also said that it does not expect the windfall tax on crude to come back as long as oil prices remain below $100 per barrel in order to attract global majors in exploration and provide fiscal stability as laid out in the recently passed Oilfields Amendments Bill.

and lastly, ONGC’s Ayana acquisition is in line with its strategy of mature asset acquisition with land, grid access and PPAs in place, according to Jefferies, who also added that the management is currently focused on acquiring solar assets.

Jefferies is working with a 2% and 9% CAGR respectively over financial year 2025-2027 but the production growth at Mumbai High is an upside risk to its estimates. For the same period, it expects a 14% CAGR in its ONGC’s Earnings Per Share (EPS). Discounting crude at $55 per barrel makes risk-reward favourable for the stock, according to the brokerage.

Out of the 30 analysts that have coverage on ONGC, 20 of them have a “buy” rating on the stock, while five each have a “hold” and “sell” rating respectively.

Shares of ONGC are among the top gainers on the Nifty 50 on Friday, but are off the highs of the day, currently trading 2.8% higher at ₹248.9.