These 5 Could Soar in FY26 according to Arif Habib Limited

4. Oil & Gas Development Company Ltd (OGDC)

OGDC remains one of the most attractive energy plays on the PSX, combining strong fundamentals, steady production growth, and undervalued financial metrics. For investors looking at long-term energy exposure, OGDC offers both upside potential and dependable dividend income.

Recent Performance

The company is on track to increase production through the development of new fields and optimization of mature assets. Output from Spinwam (569 barrels per day of condensate and 127 mmcfd of gas) and the early processing facility at Shewa, expected to come online in March 2025, will drive near-term volume growth. These additions come alongside efforts to enhance production efficiency at legacy fields.

OGDC’s balance sheet is exceptionally strong. It holds PKR 236 billion in cash, or around PKR 55 per share, giving it substantial room to increase dividends and pursue offshore investment opportunities. The company is also exploring high-impact discoveries in Abu Dhabi and Waziristan, which could serve as major earnings catalysts if successful.

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Another key development to watch is the potential sale of a stake in the Reko Diq project, which could unlock further value and improve capital allocation flexibility.

Financially, OGDC remains highly profitable, with net margins above 42 percent and a low price-to-earnings multiple of 5.63x for FY26. The price-to-book ratio of 0.68x underscores how undervalued the stock remains relative to its asset base.

Price Target and Return Potential

Arif Habib Limited has set a June 2026 target price of PKR 311.7 for OGDC, implying a total return of 43.8 percent. This includes a projected dividend payout of PKR 20 per share in FY26, giving the stock an estimated yield of 8.8 percent. With new production, strong cash reserves, and optionality from both exploration and asset sales, OGDC offers a compelling mix of value and upside for FY26.

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⚠️ This post reflects the author’s personal opinion and is for informational purposes only. It does not constitute financial advice. Investing involves risk and should be done independently. Read full disclaimer →