Best Oil & Gas Stocks

Best Oil & Gas Stocks
Best Oil & Gas Stocks

by 5paisa Research Team Last Updated: Sep 07, 2023 - 05:09 pm 4.2k Views
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When it comes to investing, oil and gas stocks come out on top. For many investors who look for long-term and serious investments, oil and gas stocks have proven to be useful. Although it may sound like a good option, it is necessary to be familiar with the ins and outs of these stocks. This comprehensive guide will take you through everything there is to know about the best oil and gas stocks in India in 2023. 

What are Oil & Gas Stocks? 

When you hear the term oil and gas stocks, you might get curious as to what these are. In simple terms, Oil and gas stocks are the equity shares of companies that are involved in refining, selling, and mining gas and oil products. 

Overview of the Oil & Gas Industry in India 

Being one of the prominent driving sectors of the Indian economy, the oil and gas industry by the year 2045 is estimated to double by 11 barrels. Investments in the sector are expected to increase significantly due to increased demand from both domestic and industrial segments. A total of 100 percent of the foreign direct investment will go into downstream and upstream refining projects approved by the government. Moreover, India plans to sell 50% of its Strategic Petroleum Reserves (SPR) in order to raise funds that can be used to build additional storage tanks in the future to offset significant price increases. 

Why Invest in Oil & Gas Stocks?

Oil And Gas Stocks

To invest or not to invest in Oil stocks in India is a common question. The majority of analysts recommend investing in oil and gas stocks for the long term. Since almost simultaneously occurring geopolitical events have caused volatility in oil and natural gas stocks, the last few years have been particularly volatile. 

Even so, Indian oil and gas are expected to have a positive run in the coming months in terms of growth in the GDP. In this sector, investments are increasing, indicating that the sector will play a large role in India's GDP growth. There is a positive outlook for Indian oil and gas stocks. 

Top 10 Oil & Gas Stocks to Invest in India

Listed below are the top oil and gas stocks to buy in India 

❖    Oil India 
❖    Deep Energy Resources
❖    Petronet LNG
❖    Selan Exploration Technology 
❖    Bharat Petroleum Corporation 
❖    Oil and Natural Gas Corporation 
❖    Reliance Industries 
❖    Asian Energy Services 
❖    Jindal Drilling and Industries 
❖    Hindustan Oil Exploration Company 

Factors to Consider Before Investing in Oil & Gas-related Stocks in India 

Before investing in the best oil stocks 2023, there are a few aspects that you should account for. Listed below are these factors: 

❖    Regulation: It is highly necessary to review and understand the policies and regulations that prevail in the industry, as the Indian government plays a significant role. Regulations can impact the profitability of the industry and the company you invest in. You should also keep an eye on any potential changes in regulations that could impact the industry.

❖    Prices: Another important factor is the price of oil. It can significantly impact the performance of the oil and gas stocks. Therefore, it is necessary to monitor the prices in order to make a smart and informed decision. 

❖    Performance of the company: Before deciding to invest in the stocks of a particular company, it is advisable to review and monitor their performance. You should research the company's financials, management, operations, and past performance. You can also track the previous records of the company and evaluate its financial position. 

❖    Competition: The Indian oil and gas industry is highly competitive; therefore, it is necessary to keep a check on the competition. This helps in making smart decisions and choosing the right oil companies' stocks. 

❖    Geopolitical and Political Risks:  Political instability and geopolitical risks can significantly impact the oil and gas industry. It is essential to monitor any significant political or geopolitical events affecting the industry or the company you are considering investing in.

❖    Social and Environmental Concerns: Another major factor that is to be kept under consideration is environmental and social concerns. You should do thorough research and assess how they cater to social and environmental concerns.  

Performance Overview of Oil & Gas Stocks List 

Listed below is the performance review of the best oil company stocks to buy in India. 

❖    Oil India

Owned and operated by the Ministry of Petroleum and Natural Gas, the Oil India company deals in the manufacturing and exploration of Oil. With a market capitalization of Rs. 27,695.71 Crores, the company has a promoter holding of 56.66%. Furthermore, the Dividend yield is estimated at 5.71%, ROCE is 13.83%, and ROE is 13.86%. The face value of the company amounts to Rs. 10, and the book value is Rs. 307.90. The EPS is Rs. 61.34, and the stock PE is valued at 4.16%. 

❖    Deep Energy Resources

This company deals in air and gas compression, work-over, and drilling, along with production and gas exploration. With a market capitalization of Rs. 328.16 Crores, the company has a promoter holding of 67.99%. Furthermore, the Dividend yield is estimated at 0%, ROCE is 0.01%, and ROE is 0.01%. The face value of the company amounts to Rs. 10, and the book value is Rs. 120.10. The EPS is Rs. 0.84, and the stock PE is valued at 122.21%. 

❖    Petronet LNG

Petronet LNG Limited is an Indian company engaged in importing and regaining liquefied natural gas (LNG). It was formed as a joint venture between the Government of India and four public sector companies - GAIL (India) Limited, Oil and Natural Gas Corporation (ONGC) Limited, Indian Oil Corporation Limited (IOCL), and Bharat Petroleum Corporation Limited (BPCL). With a market capitalization of Rs. 34,882.50 Crores, the company has a promoter holding of 50%. Furthermore, the Dividend yield is estimated at 4.89%, ROCE is 38.08%, and ROE is 26.74%. The face value of the company amounts to Rs. 10, and the book value is Rs. 102.50. The EPS is Rs. 22.51, and the stock PE is valued at 10.33%. 

❖    Selan Exploration Technology

Selan Exploration Technology Limited is an Indian oil and gas exploration and production company. The company was established in 1985 and is headquartered in Mumbai, India. Selan Exploration Technology primarily develops, develops, and produces crude oil and natural gas in India. With a market capitalization of Rs. 389.27 Crores, the company has a promoter holding of 30.46%. Furthermore, the Dividend yield is estimated at 1.96%, ROCE is 3.88%, and ROE is 3.03%. The face value of the company amounts to Rs. 10, and the book value is Rs. 232.90. The EPS is Rs. 18.76, and the stock PE is valued at 13.65%. 

❖    Bharat Petroleum Corporation

It was founded in 1952 and is headquartered in Mumbai. BPCL explores, produces, refines, and markets petroleum products, including petrol, diesel, liquefied petroleum gas (LPG), aviation turbine fuel, and lubricants. With a market capitalization of Rs. 76,227.54 Crores, the company has a promoter holding of 52.98%. Furthermore, the Dividend yield is estimated at 4.56%, ROCE is 17.72%, and ROE is 17.01%. The face value of the company amounts to Rs. 10, and the book value is Rs. Rs. 210.92. The EPS is Rs. -11.55, and the stock PE is valued at 0%. 

❖    Oil and Natural Gas Corporation

Amongst the top oil manufacturing companies in the country, Oil and Natural Gas Corporation involves the production, exploration, development, and refinement of oil. With a market capitalization of Rs. 1,92,666.98 Crores, the company has a promoter holding of 58.89%. Furthermore, the Dividend yield is estimated at 3.02%, ROCE is 18.74%, and ROE is 18.25%. The face value of the company amounts to Rs. 5, and the book value is Rs. 213.91. The EPS is Rs. 38.10, and the stock PE is valued at 4.02%. 

❖    Reliance Industries

Considered to be one of the country’s prominent multinational conglomerates, Reliance Industries is involved in natural gas, retail, energy, and petrochemicals. With a market capitalization of Rs. 15,04,148.13 Crores, the company has a promoter holding of 50.49%. Furthermore, the Dividend yield is estimated at 0.34%, ROCE is 8.21%, and ROE is 8.63%. The face value of the company amounts to Rs. 10, and the book value is Rs. 723.95. The EPS is Rs. 61.30, and the stock PE is valued at 36.26%. 

❖    Asian Energy Services  

This company deals in exploration and seismic services like workover projects, shot hole drilling, etc. With a market capitalization of Rs. 309,35 Crores, the company has a promoter holding of 59.61%. Furthermore, the Dividend yield is estimated at 0%, ROCE is 33.35%, and ROE is 32.87%. The face value of the company amounts to Rs. 10, and the book value is Rs. Rs. 51.69. The EPS is Rs. -3.61, and the stock PE is valued at 0%. 

❖    Jindal Drilling and Industries

This company began its operations in the year, 1989 and is a division of the D.P. Jindal group. It specializes in offshore drilling, among other things. With a market capitalization of Rs. 724.09 Crores, the company has a promoter holding of 67.42%. Furthermore, the Dividend yield is estimated at 0.2%, ROCE is 8.17%, and ROE is 6.97%. The face value of the company amounts to Rs. 5, and the book value is Rs. 360.60. The EPS is Rs. 40.46, and the stock PE is valued at 6.17%. 

❖    Hindustan Oil Exploration Company

This company deals in the exploration and production of oil. With a market capitalization of Rs. 1,714.53 Crores, the company has a promoter holding of 0%. Furthermore, the Dividend yield is estimated at 0%, ROCE is 4.58%, and ROE is 4.79%. The face value of the company amounts to Rs. 10, and the book value is Rs. Rs. 62.21. The EPS is Rs. 3.46, and the stock PE is valued at 37.43%. 

Company Name

Net Sales

EBITDA

Net profit

EBITDA Margins

Net profit Margin

Oil India

Rs. 14,530 Cr.

3.52%

Rs. 3,887.31 Cr.

36.82%

24.56%

Deep Energy Resources

Rs. 0.43 Cr.

90.06%

Rs. 0.03 Cr.

N/A

25.09%

Petronet LNG

Rs. 43,168.57 Cr.

5.55%

Rs. 3,352.35 Cr.

N/A

7.58%

Selan Exploration Technology

Rs. 77.31 Cr.

8.70%

Rs. 9.92 Cr.

.N/A

26.23%

Bharat Petroleum Corporation

Rs. 3,62,276.77 Cr.

3.83%

Rs. 8,788.73

N/A

1.47%

Oil and Natural Gas Corporation

Rs. 1,10,318.87 Cr.

2.42%

Rs. 40,305.74 Cr.

N/A

6.79%

Reliance Industries

Rs. 4,23,703 Cr.

22.33%

Rs. 39,084 Cr.

N/A

7.27%

Asian Energy Services

Rs. 254.14 Cr.

26.16%

Rs. 62.78 Cr.

N/A

-36.24%

Jindal Drilling and Industries

Rs. 419.86 Cr.

2.98%

Rs. 64.68 Cr.

N/A

17.99%

Hindustan Oil Exploration Company

Rs. 130.50 Cr.

14.95%

Rs. 35.83 Cr.

N/A

21.98%

 

Note: we could not find the relevant info and hence has written N/A

Conclusion 

Over the years, oil company stocks have seen significant growth. However, it has also been noticed that there are certain challenges and risks associated with the same. Pertaining to this, it is necessary for you as an investor to weigh the pros and cons and check whether the oil stocks in India the right investment option is for you or not. 

 

FAQs on Oil & Gas Stocks

Which Indian Companies are investing in Oil & Gas Sector?

The top Indian companies that are investing in the Oil sector stocks are Oil India, Deep Energy Resources, Petronet LNG, Selan Exploration Technology, Bharat Petroleum Corporation, and Oil and Natural Gas Corporation, among others. 

What is the future of Oil & Gas in India?

The Indian Oil and Gas industry is expected to grow at a significant rate. Taking a look at the statistics like natural gas consumption is estimated to increase by 25 BCM, leading to a growth of 9% by the year 2024 annually. 

Which company is the biggest in Oil & Gas Sector in India?

There are numerous companies in the Oil and Gas sector. However, among these, the biggest and largest one is the Oil and Natural Gas Corporation (ONGC). It is estimated to contribute approximately 75% to domestic production in the country. 

Is it good to invest in oil & gas stocks in India?

By taking a look at the returns and economic perspectives, the oil and gas stocks in India are highly advantageous, and it is a good choice to invest in them. 

How can I invest in oil & gas stocks using 5paisa App?

To invest in oil and gas stocks using the 5paisa app, all you have to do is install the app, sign up, search for stocks, and invest in them. The easy user interface of this trading app allows you to carry out your investment journey smoothly. 
 

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About the Author

Our research team is composed of some highly qualified research professionals, their expertise range across sectors.

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Investment/Trading in securities Market is subject to market risk, past performance is not a guarantee of future performance. The risk of loss in trading and investment in Securities markets including Equites and Derivatives can be substantial.
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