The Indian oil and gas stocks are some of the best shares for investing. By oil and gas, we refer to the equity shares of companies involved in mining, refining, and selling oil and gas products. The oil stocks come with the best returns but are also fraught with risks arising from volatile global markets. Let’s explore the best oil and gas stocks in the Indian market.
Indian oil and gas sector: At a glance
The oil and gas industry is one of the critical driving sectors of the Indian economy. India is a growing economy, and investing in oil and gas stocks is advantageous from economic and returns perspectives. The country’s oil demand is expected to double to 11 barrels per day by 2045. Demand for diesel and natural gas will grow multifold in the next five years – diesel demand will double in 2029-30. In contrast, India’s natural gas consumption is expected to increase at a 9% annual rate until 2024.
Future investments in the sector are evident with an extensive increase in demand from domestic and industrial segments. The government has approved 100% foreign direct investment in upstream and private sector refining projects. Moreover, India plans to commercialise 50% of its strategic petroleum reserve (SPR) to raise funds to build additional storage tanks to offset significant price hikes in the future.
However, the risks of gas and oil stocks are also significantly high. Here are a few potential risk factors that investors need to consider before investing in the sector.
- The volatility of crude prices in the global market
- Depreciating rupee value
- Rising demand and supply gap leading to frequent price hikes in the domestic market
- Diesel, kerosene, and LPG are still under government regulation
- Volatile subsidy-sharing pattern
- Muted outlook of the economy
- The country’s dependency on oil import
Top oil and gas stocks
Here is a list of the best oil and gas stocks to buy now. You can add more names to the list after research.
|Sl No.||Company Name||Share price change in last 12 months %||PE ratio (TTM)|
|Oil and Natural Gas Corporation||
|Hindustan Oil Exploration Company||
|Deep Energy Resources||
|Jindal Drilling and Industries||
|Bharat Petroleum Corporation||
The list of India’s oil and gas stocks is incomplete without Oil India. Oil India is a PSU oil exploration, and production company, and its business segment includes crude oil, natural gas, LPG, pipeline transportation, renewable energy and others.
Market Cap: ₹ 22,859 crore
EPS (TTM): 74.85
Profit/loss in 2022: ₹5622 crore
Oil and Natural Gas Corporation
The second on our list is Oil and Natural Gas Corporation or ONGC.
It is a PSU oil and gas company owned by the central government of India. ONGC provides energy exploration, production, refinement, and development services. One can add ONGC shares to their portfolio as one of the best oil and gas stocks.
Market Cap: ₹ 1,79,206 crore
EPS (TTM): 33.17
Profit/loss in 2022: ₹45,522 crore
Hindustan Oil Exploration Company
It is the second-largest government-owned downstream oil producer. The company’s activities involve oil exploration and production, and it has participating interest in nine gas fields in the country.
Market Cap: ₹ 1,890 crore
EPS (TTM): 3.18
Profit/loss in 2022: ₹19.99 crore
Deep Energy Resources
Deep Energy is involved in drilling, work-over, air and gas compression, and oil and gas exploration and production. The company’s stock price has moved significantly in the last twelve months.
Market Cap: ₹ 444 crore
EPS (TTM): 22.87
Profit/loss in 2022: ₹72.13 crore
In the last twelve-month period, the company’s share price has moved 133%. Adani Total Gas Ltd. is an India-based company involved in developing a city gas distribution (CGD) network to supply pipeline natural gas to industrial, commercial and household consumers.
Market Cap: ₹ 4,06,583 crore
EPS (TTM): 4.61
Profit/loss in 2022: ₹509 crore
The name, Reliance, needs to be introduced. It is an India multinational conglomerate engaged in a variety of businesses. The oil to telecom company is into energy, petrochemicals, natural gas, retail, telecommunication, mass media, and others.
Market Cap: ₹17,67,671 crore
EPS (TTM): 98.38
Profit/loss in 2022: ₹60,705 crore
Jindal Drilling and Industries
They are one of the top private sector companies in this segment. The company’s operation started in 1989, and they have been offering specialised services in offshore drilling for the last three decades.
Market Cap: ₹900 crore
EPS (TTM): 39.84
Profit/loss in 2022: ₹64.47 crore
Petronet LNG is a government company established to import liquified natural gas. The Gas Authority of India Ltd.(GAIL), Oil and Natural Gas Corporation of India (ONGC), Indian Oil Corporation Ltd. (IOC), and Bharat Petroleum Corporation Ltd. are all partners in the joint venture.
Market Cap: ₹32,231 crore
EPS (TTM): 23.07
Profit/loss in 2022: ₹3,438 crore
Bharat Petroleum Corporation
The company is a PSU run by the central government of India. It manages refineries in Mumbai, Kochi, and Bina.
BPCL is the second-largest government-owned downstream oil producer in the country.
Market Cap: ₹71,271 crore
EPS (TTM): -4.13
Profit/loss in 2022: ₹11,682 crore
The company’s business includes transmission service, natural gas marketing, petrochemicals, LPG, and liquid hydrocarbon manufacturing. It is one of the best oil and gas stocks to buy now.
Market Cap: ₹61,148 crore
EPS (TTM): 17.76
Profit/loss in 2022: ₹12,256 crore
Challenges of investing in the Indian oil and gas sector
Whether you buy oil stocks or gas stocks, you must take note of the challenges associated with the sector.
These stocks are often cyclical, meaning there will be phases of outstanding performance and downtrends.
Fluctuation and volatility
Oil companies need to deal with outside influences which have a significant impact on their stock price. Geo-political situations, inflation, and supply crunch are some of the external factors that influence the stock price of oil and gas companies.
Oil and gas production is highly unpredictable and impacts a company’s profitability. It is also a significantly capital-intensive industry that includes test runs, drilling, heavy machinery etc.
Consumption of fossil oil can raise a lot of environmental concerns and the government and environmental agencies are emphasising on reducing carbon footprint.
If these stocks have piqued your interest, explore more investment opportunities with top oil and gas stocks. Open a Demat account for free with Angel One and invest in a wide range of stocks from different sectors.
Disclaimer: “This blog is exclusively for educational purposes and does not provide any advice/tips on Investment or recommend buying and selling any stock”