Best Energy Stocks to Buy in India 2023

12 January 2023
5 min read

Energy stocks in India are a popular choice among investors today. Since Indian energy markets are taking on a significant role in the country’s economy, there is an excellent opportunity for investors to get involved. 

India is a country with a huge energy market. It has one of the third-largest oil reserves in the world. The government also has enough coal deposits to last more than 100 years. This means that India could be a great place for investors who want to invest in energy stocks.

Investing in energy stocks India can be challenging because of the country's rapid growth and its many different industries. However, there are some good reasons to consider investing in this sector:

First, there are lots of opportunities for growth in India. The country has been growing at an annual rate of 4% over the past decade, so there will be plenty of new jobs and businesses opening up every day.

Second, India's economy is expected to grow at an average rate of 6% over the next few years (which means it will have plenty of room for expansion).

And finally, India is currently one of the most polluted countries on earth—so investing here will allow you to help improve environmental issues while generating profits.

List of Best Energy Stocks in India 2023

S. No.

Top Energy Stocks in India

1.

Reliance Industries

2.

ONGC

3.

Adani Green

4.

Oil India

5.

GAIL (India)

6.

Indraprastha Gas

7.

Coal India

8.

IOCL

Factors To Consider Before Investing In Energy Sector Shares

  • Price Volatility

It is a significant factor to consider before investing in energy stocks in India. This is because energy stocks are highly volatile and can experience significant fluctuations in price. This makes them risky investments if you want to make a large amount of money.

  • Company Segmentation

Another factor to consider before investing in energy stocks is company segmentation. A company's business model may be similar to another, but it will have different performance metrics that can affect its stock value. To avoid this, it is essential to research a company's business model carefully before making an investment decision.

  • Cash Flow

Cash flow refers to the amount of money that comes into a company each month, how much goes out each month, as well as the percentage of profit or loss made from that income stream. If there isn't enough cash coming into the company, it could lead to bankruptcy or even layoffs, which could negatively impact its stock price accordingly.

  • Financial Resources

Energy stocks in India can be a great investment if you have the financial resources to support them. However, if you are looking for a safe investment with high returns, these stocks are for you.

Energy stocks in India are volatile and may fluctuate in value, but they have been known to provide significant returns on investments. This is because their prices tend to rise rapidly when demand increases or supply decreases, which increases their value.

List of Energy Stocks in India: Overview

1) Reliance Industries

Reliance Industries Limited is an India-based company which operates in the Oil to Chemicals (O2C), Oil and Gas, Retail, Digital Services and Financial Services segments. It is often on the energy sector stocks list and considered a good investment.

The O2C segment includes refining, petrochemicals, fuel retailing through Reliance BP Mobility Limited, aviation fuel and bulk wholesale marketing. Its assets comprise refinery off-gas crackers, aromatics, gasification, multi-feed and gas crackers along with downstream manufacturing facilities, logistics and supply-chain infrastructure. The Oil and Gas segment includes the exploration, development and production of crude oil and natural gas. 

2) ONGC

Oil and Natural Gas Corporation Limited is an India-based company which is engaged in the exploration, development and production of crude oil, natural gas and value-added products. Its segments include Exploration and Production; and Refining and Marketing. The Company's geographical segments include operations in India, which provides for Onshore Offshore, and Outside India. 

3) Adani Green

Adani Green Energy Limited (AGEL) is an India-based holding company. The Company is engaged in renewable power generation and other ancillary activities. The Company develops, builds, owns, operates, and maintains utility-scale grid-connected solar power, wind power, hybrid projects, and solar parks. It serves markets the Company such as Local, State, and National, with approximately 70 locations across States in India.

The Company power projects are located in Gujarat Punjab, Rajasthan, Maharashtra, Karnataka, Tamil Nadu, Andhra Pradesh, Telangana, Chhattisgarh, Madhya Pradesh, and Uttar Pradesh. In addition, its wind power plants are located across Madhya Pradesh and Gujarat. 

4) IOCL India

Indian Oil Corporation Limited is an India-based oil company considered one of the best energy sector stocks in India. The Company's segments include Petroleum Products, Petrochemicals and Other Business Activities. Its Other Business Activities segment provides gas, oil and gas exploration activities, explosives and cryogenic business, and windmill and solar power generation.

Its business interests span the entire hydrocarbon value-chain ranging from refining, pipeline transportation and marketing to exploration and production of crude oil and gas, petrochemicals, gas marketing, alternative energy sources and globalization of downstream operations.

5) GAIL (India)

GAIL (India) Limited is an India-based natural gas processing and distribution company. The Company's segments include Transmission Services, Natural Gas Marketing, Petrochemicals, LPG And Liquid Hydrocarbons and Other segments.

Its Transmission Services segment includes natural gas and liquid petroleum gas (LPG). Its Other segment includes City Gas Distribution (CGD), GAIL Tel, exploration and production (E&P) and power generation. It has interests in sourcing and trading natural gas, production of LPG, liquid hydrocarbons and petrochemicals, and transmission of natural gas and LPG through pipelines. 

Bottom Line

Energy stocks are the prime instruments in the capital market. With their high volatility, they can be volatile investment instruments. As an investor, one must be aware of the risks associated with investing in sector/stocks and bonds. 

India is on the verge of a new energy revolution. The country is home to some of the largest coal fields in the world, and it's also home to some of the largest solar power plants in the world. This combination means plenty of opportunities for investors looking to get involved in India's energy sector.

Disclaimer: This blog is solely for educational purposes. The securities/investments quoted here are not recommendatory.

To read the RA disclaimer, please click here
Research Analyst - Bavadharini KS

Disclaimer

The stocks mentioned in this article are not recommendations. Please conduct your own research and due diligence before investing. Investment in securities market are subject to market risks, read all the related documents carefully before investing. Please read the Risk Disclosure documents carefully before investing in Equity Shares, Derivatives, Mutual fund, and/or other instruments traded on the Stock Exchanges. As investments are subject to market risks and price fluctuation risk, there is no assurance or guarantee that the investment objectives shall be achieved. NBT do not guarantee any assured returns on any investments. Past performance of securities/instruments is not indicative of their future performance.
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