Best Energy Stocks in India in September 2024 Based on 5Y CAGR

India’s Energy (oil and gas) sector is among India’s 8 core industries, which plays a major role in influencing the decision-making for all the other important sections of the economy. The primary energy demand is likely to nearly double to 1,123 million tonnes of oil equivalent, as India’s gross domestic product (GDP) is forecasted to increase to US$ 8.6 trillion by 2040.

India is expected to be one of the largest contributors to non-OECD petroleum consumption growth globally. The consumption of petroleum products has increased from 158.4 million metric tons (MMT) in the fiscal year 2013-14 to 234.3 MMT in the fiscal year 2023-24.

Crude oil consumption is expected to grow at a CAGR of 4.59% to 500 million tonnes by FY40 from 223.0 million tonnes in FY23. In this article, we will see the best energy stocks based on 5Y CAGR in September 2024.

Best Energy Stocks in September 2024 – Based on 5Y CAGR

Note: The stocks have been selected from the Nifty 500 universe and sorted based on 5Y CAGR as of September 03, 2024.

Overview of Best Energy Stocks in India

1. Oil India Ltd: Oil India Ltd is engaged in exploration, development and production of crude oil and natural gas, transportation of crude oil and production of LPG. It also provides various E&P-related services for oil blocks. During Q1 FY25, Oil India achieved significant milestones in terms of growth in production numbers of both crude oil and natural gas. The company has continued to improve its crude oil production, which is higher by 6.22% in Q1 FY25 at 0.871 MMT, vis-à-vis 0.820 MMT in the quarter ended 30th June 2023.

Key metrics:

• ROE: 18%
• ROCE: 17.7%

2. Chennai Petroleum Corporation Limited (CPCL): Chennai Petroleum Corporation Limited is refining crude oil to produce & supply various petroleum products and manufacturing and selling lubricating oil additives. CPCL’s commitment to financial prudence and risk mitigation is underscored by the substantial decrease in borrowing over the past three years. The company has steadily reduced its reliance on debt from ₹9,223 Crore in FY 2021-22 to ₹2,762 Crore in FY 2023-24.

Key metrics:

• ROE: 36.5%
• ROCE: 35.4%

3. Mangalore Refinery & Petrochemicals Limited (MRPL): MRPL was set up as a joint venture (JV) between the AV Birla Group and Hindustan Petroleum Corporation Limited (HPCL). It is now a subsidiary of Oil & Natural Gas Corporation(ONGC). The company is mainly engaged in the business of refining crude oil, petrochemical business, trading of aviation fuels and distribution of petroleum products through retail outlets and transport terminals. MRPL recorded Polypropylene sales of 384 TMT during FY 2023-24 against production of 389 TMT.

Key metrics:

• ROE: 31.9%
• ROCE: 25.8%

4. Oil & Natural Gas Corpn Ltd (ONGC): ONGC is the largest crude oil and natural gas Company in India, contributing around 71 per cent to Indian domestic production. During FY24, the standalone crude oil production was 19.471 MMT, while standalone gas production was 19.974 BCM, as against

19.584 MMT and 20.628 BCM in FY ’23, respectively.

Key metrics:

• ROE: 16.3%
• ROCE: 18.4%

5. Reliance Industries Limited (RIL): RIL was founded by Dhirubhai Ambani and is now promoted and managed by his elder son, Mukesh Dhirubhai Ambani. RIL generates more than 50% of its revenue from refining crude oil. Oil 2 Chemical revenue for FY 2023-24 witnessed a 5.0% Y-o-Y decline to C 564,749 crore, primarily due to lower product price realisation following a 13.5% Y-o-Y decline in average Brent crude oil price.

Key metrics:

• ROE: 9.25%
• ROCE: 9.61%

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.