Best Oil & Gas Stocks in India
(The stocks mentioned in the blog are as per Analyst Ratings and Market Capitalization)
As the world of energy is changing rapidly, India’s oil and gas industry is also adapting to new needs and challenges. This sector has played a crucial role in India's economic growth, fulfilling a significant portion of the nation’s energy requirements. However, as the demand for energy rises, the imports of oil and gas also increase to bridge the gap between supply and demand.
This heavy reliance on imports has drawn the attention of various investors, prompting them to explore investment opportunities in the Indian oil and gas sector.
Oil & Gas Industry in India - A Brief Overview
India's oil and gas sector is one of the most crucial industries affecting several parts of the economy. Besides being the 3rd-largest consumer in the world, India experiences continuous demand for oil, making the sector highly attractive for investment. States like Assam, Gujarat and Rajasthan collectively contribute a major portion to India's oil production.
Considering the increasing demand, the government has taken proactive measures to ensure the sector's growth. It allows foreigners to invest in certain significant parts of the sectors, like natural gas and petroleum products.
Additionally, the government now lets foreign investors own up to 49% of public sector projects without reducing the government's share. This policy change has sparked considerable interest from both domestic and international companies, fostering increased investment in the sector. Among India's 23 refineries, 18 are publicly owned, 2 are jointly owned, and 3 are privately owned.
As of April 2023, India's total provisional refinery capacity stands at 253.91 million metric tonnes, making it Asia's second-largest refiner. Moreover, private companies own approximately 35% of this refining capacity. India is a significant exporter of refinery products due to its diverse refinery infrastructure. In FY23, petroleum product exports from India reached 61 MMT.
According to a report, the Indian oil and gas market will reach a size of 38.12 billion cubic metres in 2024. Moreover, it is projected to grow to 49.12 billion cubic metres by 2029, reflecting a CAGR of 5.20% during the 2024 -2029 period.
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Best Oil and Gas Stocks in India 2024 as per Analyst Ratings
Here are the top listed Oil & Gas companies in India for 2024, as per analyst ratings. We have listed the stocks as per analyst ratings, as these analysts do a comprehensive study of the stock market before rating a stock:
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S.No. |
Best Oil & Gas Stocks in India (as per analyst ratings) |
BUY Analyst Rating (in %) |
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1. |
78 |
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2. |
71 |
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3. |
67 |
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4. |
52 |
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5. |
50 |
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*Our stock selection criteria for top stocks based on analyst ratings are mentioned at the bottom of this blog. |
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Top Oil & Gas Stocks in India in 2024 as per Market Capitalisation
The following table mentions the Oil & Gas stocks in India in 2024 as per market capitalisation:
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S.No. |
Top Oil & Gas Stocks in India (as per market capitalisation) |
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1. |
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2. |
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3. |
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4. |
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5. |
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*Our stock selection criteria for top stocks based on Market Capitalisation are mentioned at the bottom of this blog. |
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Overview of Best Oil & Gas Stocks in India as per Analyst Ratings
Here is a brief description of the best oil and gas industry stocks as per analyst ratings listed above:
1) Reliance Industries Limited
Based in Mumbai, Reliance Industries Limited operates across multiple sectors. It includes petroleum refining and marketing, hydrocarbon exploration and production, renewables such as solar and hydrogen, petrochemicals, advanced materials and composites, digital services, etc. The company operates through segments like Oil to Chemicals (O2C), Oil and Gas, and Digital Services.
Reliance Industries’ Oil and Gas section focuses on exploring, developing and producing crude oil and natural gas. Their Retail segment involves consumer retail and related services.
On the other hand, the O2C segment covers refining, fuel retailing, aviation fuel, petrochemicals and wholesale marketing, along with the transportation of fuels, polymers, polyesters and elastomers.
2) Oil & Natural Gas Corporation Limited
Maharatna ONGC (Oil and Natural Gas Corporation Limited) stands as India's largest company in crude oil and natural gas production and exploration. Downstream companies like HPCL, MRPL, BPCL and IOC utilise crude oil as a raw material to manufacture petroleum products such as kerosene, petrol, naphtha, diesel and cooking gas LPG.
ONGC produces more than 1.26 million barrels of oil equivalent, accounting for approximately 71% of India's domestic production. Furthermore, over 76% of the crude oil extracted by ONGC falls under the category of Light & Sweet.
ONGC distinguishes itself by possessing in-house service capabilities across all aspects of oil and gas exploration and production, along with related oil-field services. Additionally, ONGC's wholly-owned subsidiary, ONGC Videsh Ltd. (OVL), stands as India's largest multinational, holding 35 Oil & Gas assets in 15 countries.
3) GAIL (India) Limited
Incorporated in 1984, GAIL (India) Limited aims to promote the efficient use of Natural Gas for the nation's benefit. The government of India currently holds 51.45% shares of the company. GAIL started as a Gas Transmission Company and has expanded its operations significantly since then.
It now operates a vast network of natural gas pipelines, LPG pipeline systems, gas processing plants and petrochemical projects. GAIL is also involved in renewable energy projects and city gas distribution and has a presence in several countries overseas.
Additionally, GAIL has expanded globally by setting up offices and branches in countries such as the USA, Singapore and China. It is also involved in exploring and investing in energy projects overseas. GAIL is dedicated to improving India's energy sector and boosting economic growth through ongoing innovation and growth initiatives.
4) Indian Oil Corporation Limited
Headquartered in New Delhi, Indian Oil Corporation Limited (IOCL) engages in various activities such as the production of natural gas and oil, refining crude oil, marketing petroleum products and natural gas and transporting pipelines. The company is supported by a robust infrastructure comprising 70.05 million metric tonnes per annum of refining capacity and operates in more than 34,000 fuel stations nationwide.
The company operates through 7 major business divisions, including refineries, research and development, pipelines, exploration and production, marketing, petrochemicals, and explosives and cryogenics.
Moreover, it operates a network of fuel stations, storage terminals, depots, aviation fuel stations, LPG bottling plants and lube blending plants. Indian Oil Corporation Limited continues to grow its international presence with establishments in the UAE, Bangladesh, Singapore, Mauritius, USA, Myanmar and Sri Lanka.
5) Petronet LNG Limited
Established in 1998, Petronet LNG Limited (PLL) is headquartered in New Delhi. The company primarily operates in importing and processing liquefied natural gas (LNG) and operates under the Natural Gas Business segment.
Petronet LNG Limited manages terminals, including the Kochi LNG Terminal, Dahej LNG Terminal, and Solid Cargo Port Terminal.
The Kochi LNG Terminal, located in Kerala, is a receiving and re-loading terminal with a similar capacity. Meanwhile, situated in Gujarat, the Dahej LNG Terminal is a receiving and regasification terminal with an initial capacity of approximately 5 million metric tons per annum. On the other hand, the Solid Cargo Port Terminal facilitates bulk imports or exports of products like coal, steel and fertiliser.
Factors to Consider Before Investing in Oil & Gas Stocks in India
Before you invest in Gas & Oil company stocks, there are several factors you should consider. Here are some key aspects to keep in mind:
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Financial Performance
Before investing in a particular company's stocks, it is wise to assess its performance. Research the company's financials, operations, management and past track record to make an informed decision.
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Regulations
Government Regulations can impact both industry profitability and the performance of the company you are considering investing in. Be aware of any potential changes in regulations that could affect the industry.
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Prices
The price of oil is a critical factor that can greatly influence the performance of oil and gas stocks. You must keep a close eye on oil prices, as they are essential for making informed investment decisions.
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Social and Environmental Concerns
Another significant factor influencing the stocks of the oil and gas industry is the environmental and social concerns of the nation. You must conduct thorough research to assess how companies address these concerns and their impact on the overall environment.
Should You Invest in Oil & Gas Stocks?
Investing in Indian stocks in the oil and gas sector comes with its share of challenges. One major obstacle is the volatility of oil prices, which can significantly affect the performance of oil-related stocks. Factors such as global supply and demand dynamics, geopolitical tensions and natural disasters can all contribute to sharp fluctuations in oil share prices.
Additionally, with increasing awareness about the environmental impact of fossil fuels, there is growing pressure on oil and gas companies in India to reduce their carbon footprint and transition to more sustainable energy sources.
This shift towards sustainability can make it harder for oil shares to remain profitable in the long run. Hence, you must consider these factors carefully and weigh the risks before deciding whether to invest in oil and gas stocks.
The Bottom Line
If you are considering investing in oil and gas industry stocks, it is crucial to carefully weigh all factors before making any decisions. Furthermore, you must seek advice from professionals who can assist you in making informed investment choices.
It is crucial to note that doing a thorough research and adopting a long-term perspective is key to successful investing.
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*Stock Selection Criteria for Top Stocks Based on Analyst Rating Investors must carefully read through the following information on stock selection criteria while running through the stocks based on analyst ratings- These stocks have been shortlisted as per Analyst ratings provided by the I/B/E/S (The Institutional Broker’s Estimate System) database, further aggregated by Refinitiv. Ratings are determined by analysts' forecasts of company performance, taking into account metrics like earnings per share, sales, and net income. These ratings should not be construed as investment advice/recommendations/offer/solicitation of an offer to buy/sell any securities by Groww Invest Tech Pvt. Ltd. (formerly known as Nextbillion Technology Pvt. Ltd.). Before investing, investors must conduct independent research and not solely rely on the information provided here. This will allow investors to make appropriate investment decisions based on their financial goals, investment objectives and risk tolerance. |
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*Stock Selection Criteria for Top Stocks Based on Market Capitalisation These stocks are chosen based on their market capitalization, which represents the total value of a company's outstanding shares. The selection is arranged in descending order, placing the largest companies first and the smaller ones later. This helps prioritize stocks based on their market size. It is important to note that market capitalization in no way guarantees a company’s performance or the returns from its stocks. However, it can be used as a criterion for shortlisting companies from within a sector. Investors should recognize that other factors, such as financial health, management efficiency, and market trends, play crucial roles in determining the actual success of an investment. This stock selection should not be construed as investment advice/recommendations/offer/solicitation of an offer to buy/sell any securities by Groww Invest Tech Pvt. Ltd. (formerly known as Nextbillion Technology Pvt. Ltd.). |
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Disclaimer: This blog is solely for educational purposes. The securities/investments quoted here are not recommendatory. To read the RA disclaimer, please click here |