List Of Best Oil and Gas Stocks in India 2024
Have you ever thought about how you get gasoline? This is because of the companies involved in the extraction, refining, and marketing of petroleum and natural gas products. The oil and gas industry is vital to meet the constantly rising demand for energy.
In this blog, we will discuss the companies involved in the oil and gas industry, the benefits of investing in their stocks, key factors to consider before investing, and the industry’s future outlook.
Overview of the Oil and Gas Industry
A key factor in the growth of the Indian economy is the oil and gas sector. India is one of the biggest energy consumers in the world. The businesses in this industry contribute significantly to meeting the nation’s energy needs and employ a large workforce. The businesses in this industry work on oil and gas exploration, production, refining, and distribution.
India consumed approximately 40.3 million metric tons (MMT) of petroleum products in the first quarter of FY 2024-25. According to some estimates, India’s energy demand is likely to double by 2050, which presents a growth opportunity for companies in the oil and gas sector.
Top 5 Oil and Gas Stocks Based on Market Capitalization
The top Oil and Gas stocks in 2024 are:
| S.No. | Oil and Gas Stocks |
|---|---|
| 1 | Reliance Industries Limited |
| 2 | Oil & Natural Gas Corporation Limited |
| 3 | Indian Oil Corporation Limited |
| 4 | Bharat Petroleum Corporation Limited |
| 5 | Adani Total Gas Limited |
The Oil and Gas stocks have been listed in descending order based on their market capitalization in the table below:
| Company | Market Capitalization (In Crores) | Share Prices (In INR) | 52 Week High Price | 52-Week Low Price |
| Reliance Industries Limited | 20,41,956 | 3,018 | 3,218 | 2,220 |
| Oil & Natural Gas Corporation Limited | 4,17,162 | 332 | 339 | 171 |
| Indian Oil Corporation Limited | 2,49,310 | 177 | 197 | 85.5 |
| Bharat Petroleum Corporation Limited | 1,42,650 | 329 | 344 | 166 |
| Adani Total Gas Limited | 97,713 | 888 | 1,260 | 522 |
Best Oil and Gas Stocks in India 2024 Based on Market Capitalization – An Overview
The best oil and gas stocks in India are given below, along with a brief overview:
1. Reliance Industries Limited
Mr. Dhirubhai Ambani launched Reliance Textile Industries in 1957, and it went public through an initial public offering (IPO) in 1977. It started growing its operations in the petrochemical industry in 1980. Following his death, the firm was divided between Dhirubhai Ambani’s two sons, Anil Ambani and Mukesh Ambani. The corporation reached new heights under Mukesh Ambani’s direction by diversifying into several industries, such as retail and telecommunications. The business is also making enormous investments in the field of renewable energy. The company’s headquarters are located in Mumbai.
2. Oil and Natural Gas Corporation Limited
The Government of India founded ONGC in 1956 to explore and refine oil and natural resource reserves. At Cambay, the company found the first oil field in 1959. ONGC established ONGC Videsh Limited as its overseas arm and operates in 15 countries. The company’s main office is in New Delhi.
3. Indian Oil Corporation Limited
Indian Oil Company Limited and Indian Refineries Limited merged to form Indian Oil Corporation Limited in 1964. They established refineries in Gujarat, Barauni, Guwahati, etc., to grow their business and refine 31.44% of the total oil refined in India. The corporation will begin building infrastructure for electric vehicles and hydrogen fuel in 2023. Its main office is located in New Delhi.
4. Bharat Petroleum Corporation Limited
Bharat Petroleum Corporation Limited was established on 24 January 1976 after Bharat Refineries Limited acquired Burmah Shell. Petroleum and petroleum-related products are explored, refined, distributed, marketed, and retailed by the corporation. It is run by the Indian government’s Ministry of Petroleum and Natural Gas. The company’s headquarters is located in Mumbai.
5. Adani Total Gas Limited
Adani Total Gas Limited was formed as a result of a joint venture between Adani Group and TotalEnergies in 2005. The company’s main goal is to build a private city gas distribution network in India. Having begun operations in Gujarat, the company eventually expanded its operations into Uttar Pradesh and Haryana in 2013. The company’s headquarters is located in Ahmedabad.
Top Oil and Gas Stocks Based on 1-Year Return
| S.No. | Oil and Gas stocks |
|---|---|
| 1 | Oil India Limited |
| 2 | Gulf Oil Lubricants India Limited |
| 3 | GAIL |
| 4 | ONGC |
| 5 | Castrol India Limited |
Performance of Top Oil and Gas Stocks in India
The Oil and Gas Stocks have been listed in descending order based on their 1-year returns in the table below:
| Company | 1-Year Return |
| Oil India Limited | 209.48 % |
| Gulf Oil Lubricants India Limited | 140.02 % |
| GAIL | 95.91 % |
| ONGC | 93.42 % |
| Castrol India Limited | 80.29 % |
Best Oil and Gas Stocks in India 2024 Based on 1-Year Return – An Overview
The best Oil and Gas stocks according to 1-year return are given below, along with a brief overview –
1. Oil India Limited
The company was founded in 1959 as a joint venture between the Government of India and Burmah Oil Company. In 1981, Oil India Limited became a wholly owned government enterprise. The corporation plays a vital role in the nation’s domestic oil production and makes significant contributions to oil and gas exploration. OIL also has international operations in seven countries.
2. Gulf Oil Lubricants India Limited
In 1984, Hinduja Group acquired Gulf Oil International Ltd. In 2014, Gulf Oil International demerged the lubricants segment to form a separate company named Gulf Oil Lubricants India Ltd. In 2021, the company launched an eLEC range of lubricants for electric vehicles and entered into a strategic partnership with Techperspect Software Pvt. Ltd. to develop e-mobility solutions.
3. GAIL
Gas Authority of India Limited, or GAIL, is a public sector enterprise under the Ministry of Petroleum and Natural Gas. It was established in 1984. The corporation generates liquefied petroleum gas and owns and runs a substantial network of pipelines for natural gas transportation throughout India. The company also has operations in the production of solar and wind power. Its headquarters is located in New Delhi.
4. Castrol India Limited
Castrol India Limited is a well-known company in the automotive sector. Castrol India was incorporated as Indrol Lubricants and Specialities Pvt. Ltd in 1979 and started importing automotive lubricants. The business was listed on the Bombay Stock Exchange in 1982. The name of the company was changed to Castrol India Ltd. in 1990. With a roughly 20% market share, the firm is the second-largest producer of automobile lubricants. Its headquarters are located in Mumbai.
An overview of ONGC has been given above.
Key Performance Indicator
| Company | ROE (%) | ROCE (%) | Debt to Equity | P/E | P/B |
| Reliance Industries Limited | 8.77 | 9.38 | 0.41 | 29.70 | 2.4 |
| Oil and Natural Gas Corporation Limited | 14.60 | 15.43 | 0.36 | 8.81 | 2.04 |
| Indian Oil Corporation Limited | 22.75 | 23.90 | 0.67 | 5.97 | 1.84 |
| Bharat Petroleum Corporation Limited | 35.51 | 32.53 | 0.60 | 7.49 | 1.37 |
| Adani Total Gas Limited | 18.64 | 20.70 | 0.41 | 146.37 | 40.44 |
| Oil India Limited | 13.10 | 15.06 | 0.49 | 14.39 | 1.83 |
| Gulf Oil Lubricants India Limited | 23.78 | 30.73 | 0.26 | 19.9 | 5.86 |
| GAIL | 12.85 | 11.28 | 0.24 | 15.31 | 1.59 |
| Castrol India Limited | 40.72 | 53.91 | 0 | 29.96 | 12.4 |
Benefit of Investing in Oil and Gas Stocks
The following are some advantages of investing in oil and gas stocks:-
- Diversification – Investors can diversify their portfolios by investing in oil and gas stocks and reduce the impact of market fluctuations.
- Demand – The energy demand is expected to rise significantly in the near future, which will also increase the revenues of oil and gas companies.
- Government Support – Since this industry is regarded as the foundation of the Indian economy, the government offers several tax breaks and incentives to encourage it.
Factors to be considered before investing in Oil and Gas Stocks
When investing in oil and gas stocks, a few factors listed below must be considered:
- Performance of Company – Analyze the company’s performance using various criteria, including operational structure, financial indicators, management experience, etc.
- Government Regulation – Since the government heavily regulates this industry, any changes to the regulations may have an immediate effect on the profitability of the business.
- Volatility of Prices – Since the cost of gas and oil varies daily, any price change can have an immediate effect on these companies.
- Environmental Concern – Investors may adjust their investment preferences in response to social and environmental concerns expressed by the public regarding the oil and gas industry.
Future of Oil and Gas Sector in India
India’s energy needs are growing, and to meet this demand, the government is importing more gas and oil. Owing to reliance on imports, several businesses tried looking into potential investment prospects in this industry. By 2030, the government wants to increase the capacity for refining to 450 million metric tonnes per annum (MMTPA). Hence, the future of the oil and gas sector is very promising in India.
Conclusion
In summary, investing in the oil and gas industry can present a significant opportunity for portfolio diversification and strong growth potential. However, there are also dangers associated with investing in this industry, including shifts toward renewable energy, price volatility, and regulatory changes. Therefore, you must speak with your financial advisor before making investing decisions.
Frequently Asked Questions (FAQs)
Which companies operate in the Oil and Gas sector in India?
Reliance Industries, ONGC, IOCL, GAIL, BPCL, etc., operate in the oil and gas sector.
Which factors affect the oil and gas stocks?
Several factors, including supply and demand, commodity prices, regulatory changes, and economic conditions, directly impact oil and gas stocks.
Should I invest in oil and gas sector stocks?
It’s true that if you’re a long-term investor, you can diversify your portfolio by investing in this industry, but only after talking to your financial advisor and considering your risk tolerance.
What do you mean by OPEC countries?
The Organisation of the Petroleum Exporting Countries is known as OPEC. At the moment, OPEC has twelve countries as its members.
What are the factors that influence the price of oil?
The two main variables affecting the price of oil are supply and demand.
