News

This is a Mint Premium article gifted to you. Subscribe to enjoy similar stories.

Today, we recommend two dividend stocks, one from the oil and gas sector and another from the metals and mining sector. We also analyze the market's performance on Thursday to understand what may lie ahead for the stock indices in the coming days.

ONGC (Current price: ₹245)

Target price: ₹290 in 12 months

Stop loss: ₹223

Why it’s recommended: ONGC, India’s largest producer of crude oil and natural gas, holds the prestigious “Maharatna" status, highlighting its significant national importance. It plays a dominant role in the Indian energy sector, accounting for approximately 71% of the country's total crude oil and natural gas production. 

The company is well-diversified and integrated across the energy value chain, with a presence in upstream (52 MMToE), refining (46 MMTPA), petrochemicals (3.8 MMTPA), value-added products (2,500 KTA), LNG (22.5 MMTPA), power generation (726 MW), and renewables (410 MW) through seven energy-related subsidiaries.

In FY25, ONGC reported operating revenue of ₹6,63,262.31 crore, marking a 1.5% year-on-year increase. However, profit after tax stood at ₹38,328.59 crore, which was 30.7% lower than the previous year due to a 100% rise in exploration costs. The company allocated ₹10,300 crore for exploration in FY25, a 25% increase over FY24, and completed five onshore and four offshore discoveries. The total capital expenditure for the year amounted to ₹62,000 crore.

ONGC’s domestic proven oil reserves were recorded at 515.17 million tonnes of oil equivalent (MMTOE) as of FY25, slightly higher than the 514.83 MMTOE reported in FY24. Its renewable energy arm, ONGC Green Ltd, acquired PTC Energy Ltd (PEL), which operates 157 wind turbines with a combined capacity of 288.80 MW across Andhra Pradesh, Madhya Pradesh, and Karnataka.

The company remains among the top dividend payers in India. In FY25, it distributed a total dividend of ₹15,410 crore, declaring a dividend of ₹12.25 per share, resulting in a dividend yield of 5%.

Risk factors: ONGC's revenue is significantly impacted by fluctuations in global crude oil and gas prices, making the company vulnerable to price volatility. Additionally, the company faces challenges related to changes in regulatory frameworks, licensing requirements, and compliance timelines, which can affect its operations and increase the risk of legal complications.

Nalco (Current price: ₹194)

Target price: ₹225 in 12 months

Stop loss: ₹179

Why it’s recommended: Established in 1981, National Aluminium Co. Ltd  (Nalco) is a 'Navratna' Central Public Sector Enterprise (CPSE) under Schedule 'A'. It stands as one of India’s largest integrated producers of bauxite, alumina, aluminium, and power. The company operates its own Panchpatmali Bauxite Mines to supply the pithead alumina refinery located at Damanjodi in Koraput district, Odisha, along with an aluminium smelter and captive power plant in Angul. Nalco’s operational capacity includes 6.825 MTPA of bauxite, 2.1 MTPA of alumina refinery, 0.46 MTPA of aluminium smelting, 1,200 MW of captive power, 4 MTPA of coal production, and 198 MW of wind power.

In FY25, Nalco achieved its highest-ever revenue of ₹16,787.63 crore and a record profit after tax of ₹5,267.94 crore, reflecting a 165% increase over the previous year. The management reported a 46% improvement in Ebitda margin, driven by elevated alumina and aluminium prices, and aims to maintain a margin target of around 36-37% for FY26.

For FY26, the company plans to raise alumina production by 200,000 tonnes to 22,50,000 tonnes and has allocated a capital expenditure of ₹1,700 crore for the year. For FY27, it has earmarked ₹2,000 crore for investments in both aluminium and alumina projects. Nalco is pursuing major expansion projects, including new capacities for bauxite mines (3.5 MTPA), alumina refinery (1 MTPA), aluminium smelter (0.5 MTPA), and a captive power plant (1,080 MW).

Nalco also maintains a consistent track record of dividend payouts, offering both interim and final dividends. For FY25, it declared a total final dividend of ₹8 per share, distributed as two interim dividends of ₹4 per share each, paid in November 2024 and February 2025.

Risk factors: The company’s earnings are highly dependent on global aluminium prices, which are subject to volatility based on supply-demand dynamics, geopolitical developments, and economic cycles. Moreover, prices of key raw materials like coal, caustic soda, etc., can fluctuate, thus negatively affecting the company’s margins.

The Nifty 50 had a gap-up start to the day, opening at 25,268.95, up 23.25 points, or 0.09%, from the closing price of 25,244.75 of the previous day. The index gained 304.25 points, or 1.21%, on Thursday, with a day-high of 25,565.30 in the morning and closing at 25,549. The RSI was at 66.33, far below the overbought zone of 70, and the Nifty closed above all four of the 20/50/100/200-day EMAs on the daily chart. 

The Sensex concluded the day at 83,755.87, up 1,000.36 points, or 1.21%, with an RSI of 65.39. The upsurge in the markets was due to the easing of tensions in Israel and Iran in the Middle East. Moreover, the dollar index hit a three-year low of 97, and strong demand from DIIs—these catalysts are fueling the upsurge of the market.

Most indices were green on Thursday. The Nifty Metal Index, which closed at 9,544.55, up 215.35 points or 2.31%, was among the top gainers. The index was lifted by stocks like Hindustan Copper, which soared 4.96%; SAIL and Jindal Steel, which jumped more than 3%; and other stocks, including Vedanta, Jindal Stainless, and Nalco, which increased by up to 3%.

Moreover, the Nifty Oil and Gas Index gained 213.5 points, or 1.86%, to close at 11,695.90. Top gainers of this index were Aegis Logistics, Bharat Petroleum, and IOCL, which increased by more than 3% on Thursday. The Nifty Infrastructure Index closed at 9,355.80 points, a jump of 150.30 points, or 1.63%, with major gainers like Shree Cement, BPCL, and IOCL increasing more than 3% on Thursday.

While the Nifty Media Index, however, fell by -19.30 points, or -1.09%, and closed at 1,743.85 points. The index declined as a result of heavyweights such as Network 18 Media, Zee Entertainment, DB Corp, and Tips Music plunging up to 3%. This fall was mainly due to profit booking from Network 18 Media. Another significant loser was the Nifty Realty Index, which closed at 1,009.50, down -10.15 points or -1.00%.

Hong Kong's Hang Seng declined -149.27 points, or -0.61%, to 24,325.40. The Kospi in South Korea closed at 3,079.56, down -0.92% or -28.69 points. Japan’s Nikkei 225 climbed up 642.51 points, or 1.65%, settling at 39,584.58, reaching a 5-month high. Shanghai's Composite Index closed the day lower at 3,448.45, down -7.52 points, or -0.22%, while the Shenzhen Index decreased -50.25 points, or -0.48%, to 10,343.48.

Download the Mint app and read premium stories

Log in to our website to save your bookmarks. It'll just take a moment.

You are just one step away from creating your watchlist!

Oops! Looks like you have exceeded the limit to bookmark the image. Remove some to bookmark this image.

Your session has expired, please login again.

You are now subscribed to our newsletters. In case you can’t find any email from our side, please check the spam folder.

This is a subscriber only feature Subscribe Now to get daily updates on WhatsApp