Top Oil Shares in India 2024: Meaning, Factors & Benefits

The world’s energy systems are undergoing rapid transitions, and the Oil and Gas industry isn’t left behind. The Oil and Gas production in India has contributed significantly to the country’s economic growth by covering two-thirds of the primary needs. However, the country’s domestic oil and gas production is insufficient to meet its growing demand. As a result, India became heavily dependent on imports. This scenario has led to an increased interest among investors to invest in the gas and oil shares of Indian companies. Given the changing landscape, gas and oil company stocks have become popular investment choices. Thus, in this blog, we’ll discuss some valuable insights about oil and gas share prices. So, without further ado, let’s dive into the world of popular oil and gas company shares and understand why investors are keen on investing in this sector.

What are Oil & Gas Company Stocks?

Oil company shares are publicly traded companies involved in the exploration, production, refining, and distribution of oil and gas share prices. These oil shares usually engage in upstream activities such as drilling and exploration, midstream activities (transportation and storage), and downstream activities (refining and distribution of petroleum products).

The oil company share prices in the oil shares list are the prices at which these stocks are traded in the stock market. Thus, various factors can affect the prices of NSE oil shares and companies dealing with oil and gas in India. This includes the company’s financial performance, future growth prospects, and market trends.

Thus, you can invest in the best oil stocks in India through multiple means. It includes buying oil company stocks, investing in exchange-traded funds (ETFs) that track the oil sector’s performance, or investing in an oil and gas sector portfolio. Portfolio investing diversifies the risks of investing in multiple companies at the same time. 

Therefore, investing in the best oil sector stocks in India can offer an opportunity to benefit from the rising gas and oil share prices. However, it is important to note that investing in oil stocks to buy can be volatile due to its cyclical nature. Additionally, external factors may impact oil share prices.

List of Best Oil Sector Stocks in India

We have compiled a list of some of the most well-known natural gas stocks in India and oil company stocks. Let’s take a look at them.

Stock Name	Market Cap (in Cr)	1Y Return	5Y Average Net Profit Margin	5Y Average Return on Investment	Fundamental Score
Jindal Drilling and Industries Ltd	₹2,017.67	136.45	-36.55	-3.43	8.65
United Drilling Tools Ltd	₹497.80	2.52	22.89	17.45	6.41
Seamec Ltd	₹2,707.91	51.86	22.37	13.47	5.44
Aban Offshore Ltd	₹370.41	74.04	-421.45	-	5.00
Alphageo (India) Ltd	₹226.41	66.80	6.76	5.33	4.38
Aakash Exploration Services Ltd	₹114.20	62.12	6.57	9.93	4.04
Deep Energy Resources Ltd	₹586.96	62.56	30.12	0.20	-
Dolphin Offshore Enterprises (India) Ltd	₹1,372.51	2,662.34	-	-	-
Global Offshore Services Ltd	₹121.06	90.48	-68.52	-	-
Oil Country Tubular Ltd	₹177.40	157.23	-10,606.23	-	-

Disclaimer: Please note that the above list is for educational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing.

Note: The data is from 15th April, 2024. However, for real-time updates on oil and gas stock prices and market trends, visit smallcase stocks collection today!

Oil and Gas Company’s Shares – A Brief Overview

Let’s review some gas and oil company share list in detail.

Jindal Drilling and Industries Ltd

Jindal Drilling & Industries Ltd (JDIL) is a leading Indian company in offshore drilling and allied services, including directional drilling and mud logging. It is part of the D.P. Jindal Group. It provides services to entities involved in the exploration of oil and gas.

United Drilling Tools Ltd

United Drilling Tools is a key player in the oil and gas industry, providing cutting-edge drilling solutions and equipment. The company is actively involved in the exploration and extraction of hydrocarbons, contributing to the development of India’s energy sector.

Seamec Ltd

Seamec is a renowned offshore services provider offering various underwater engineering and subsea construction services. The company’s expertise in marine operations positions it as a valuable asset in India’s offshore oil and gas exploration activities. 

Aban Offshore Ltd

Aban Offshore Ltd is an Indian multinational offshore drilling services provider headquartered in Chennai, India. It is the largest private player in the Indian offshore drilling industry. The company is also engaged in the ownership, maintenance, and manufacture of wind turbines for wind power generation in India.

Alphageo (India) Ltd

Alphageo (India) Ltd is an India-based seismic service provider incorporated in 1987, with its headquarters in Hyderabad. The company offers geophysical seismic data acquisition, processing, and interpretation services for exploring hydrocarbons and minerals.

Aakash Exploration Services Ltd

Aakash Exploration Services Ltd. is an India-based company that provides oil and gas exploration services. The company is engaged in various projects, including Hindustan Oil Exploration Company Ltd, Oil and Natural Gas Corporation Limited (ONGC), Reliance Industries, Vedanta Limited, and Oil India Limited.

Deep Energy Resources Ltd

Deep Energy Resources Ltd (DERL) is an India-based company in the oil and gas industry. They focus on both conventional and unconventional methods of exploration and production. The company provides services like air and gas compression, drilling, gas dehydration, oil & gas exploration and production.

Dolphin Offshore Enterprises (India) Ltd

Dolphin Offshore Enterprises (India) Ltd (DOEIL) is a leading provider of underwater services to the Indian oil and gas industry. Founded in 1979, the company has a diversified portfolio for undertaking turnkey projects involving sub-sea and marine services and as an EPC contractor.

Global Offshore Services Ltd

Global Offshore Services Ltd., founded in 1976, is an India-based company that specializes in chartering offshore support vessels for oil and gas exploration and production companies. 

Oil Country Tubular Ltd

Oil Country Tubular Limited (OCTL), based near Hyderabad, India, has been manufacturing oil and gas well pipes since 1985 as a member of the Kamineni Group. Their product range encompasses various components essential for oil and gas drilling, exploration, and production, including casing, tubing, drill pipe, production tubing, tool joints, etc.

Oil and Gas Sector – A Synopsis

The Oil & Gas industry in India dates back to 1867, when oil was discovered at Makum near Margherita, about 8 miles from Digboi. Since then, the sector has come a long way. Thus, due to the growing gas fields in India, the Indian government has taken several steps to develop the industry and make it more self-sufficient.

The Ministry of Petroleum and Natural Gas, Government of India, closely regulates oil and gas companies in India, covering all supply chain links. These include exploration and production, refining, marketing, and distribution, as well as importation, exportation, and conservation.

Currently, the Indian oil and gas industry is transitioning towards cleaner and greener energy sources such as natural gas and renewables. Therefore, the government’s efforts to promote natural gas usage and increasing investment in renewable energy sources like solar and wind power indicate a move towards a more sustainable energy mix. 

The Indian Oil and gas sector is projected to grow at a moderate pace, with crude oil’s share in India’s energy mix expected to decline gradually. Therefore, companies in the Indian Oil and gas sector are adapting to new challenges and exploring new opportunities. As a result, investing in a crude oil stock in India can be a good investment opportunity. As always, investors must do their own research and/or consult their financial advisor before investing.

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How to Identify Best Gas and Oil Shares for Investing?

Identifying oil and best gas stocks in India for investing requires careful research and analysis. Here are some key steps you can follow:

Understand the Sector

• Research the Oil and Gas Industry: Get familiar with the different segments (upstream, midstream, downstream) and their associated risks and rewards.
• Track Oil and Gas Prices: Understand the factors influencing oil prices. Such as global supply and demand, geopolitical events, and economic conditions.

Select Your Investment Criteria for Oil Shares

• Risk Tolerance: Determine your risk tolerance and choose stocks accordingly. Large integrated companies offer stability, while smaller exploration companies can be riskier but offer higher potential returns.
• Investment Horizon: Consider your long-term goals and choose the top 100 oil and gas companies in India with solid growth potential or sustainable dividends.
• Financial Performance: Analyse company financials, including revenue, profitability, debt levels, and cash flow.

Research Individual Oil Shares

• Financial Analysis: Evaluate the company’s financial statements, including income statements, balance sheets, and cash flow statements.
• Management Team: Research the experience and track record of the management team.
• Competitive Landscape: Analyse the company’s position within the industry and its competitive advantages
• Growth Potential: Assess the company’s future growth prospects, including new projects and acquisitions.

Diversify your Portfolio

• Don’t put all your eggs in one basket. Therefore, to mitigate risk, invest in a variety of oil and gas stocks and other sectors.

Features of Gas & Oil Shares

Here are some of the key features of oil and gas sector stocks:

• High Volatility: Gas and oil share list prices are highly volatile. Thus, this can lead to significant volatility in the gas and oil share prices which can be a source of risk for investors. However, it can also create opportunities for those who can time the market correctly.

• Cyclical: The oil and gas sector is cyclical, meaning that it experiences periods of boom and bust. This cyclicality can be a challenge for investors, as it can be difficult to predict when the next boom or bust will occur.

• High Dividend Yields: Many oil and gas companies pay high dividend yields. Thus, it can be a good way for investors to generate income from their investments.

• Exposure to Global Factors: The oil and gas sector is heavily influenced by global factors, such as geopolitical events and economic conditions. This can make it a complex sector to invest in, but it can also offer opportunities for investors who understand these factors.

• Potential for Long-Term Growth: Investors anticipate a continued growth in the demand for oil and gas sector stocks globally in the coming years. This could lead to long-term growth for oil and gas companies.

• ESG Investing: Environmental, social, and governance (ESG) investing is potentially becoming popular. Companies committed to sustainability are increasingly attracting investors’ attention, which could lead to increased demand for oil and gas companies that can demonstrate their commitment to ESG principles.

How to Invest in Natural Gas & Oil Shares in India?

Investing in oil & gas companies in India can be done through several avenues. First, you can open a trading account with a stockbroker and invest in publicly listed Indian oil and gas companies.

Additionally, you can explore mutual funds and exchange-traded funds (ETFs) that focus on the energy sector and other top oil and gas companies in India. Consider investing in international energy companies listed on foreign stock exchanges. You can do it through international brokerage accounts or ETFs that track global energy indices for global exposure.

Types of Oil Shares

The oil and gas industry is one of the largest and most influential sectors in the global economy, with many companies involved in every stage of the process. Therefore, these oil share prices are broadly categorized into three different categories that have been listed below:

• Upstream Stocks: Primarily involves oil and natural gas exploration and production. They are responsible for finding and extracting these resources from the ground. Therefore, Oil and Natural Gas Corporation (ONGC) is an example of upstream stock.

• Midstream Stocks: Involved in the transportation and storage of oil and natural gas. They operate pipelines, terminals, and storage facilities that move these resources from production to refineries or other customers. Thus, Bharat Oil & Waste Management Limited is an example of a midstream stock.

• Downstream Stocks: These oil shares are refining and marketing oil and gas products. They take the crude oil upstream companies to produce and refine it into usable products such as gasoline, diesel, and jet fuel. They also distribute these products to customers such as gas stations and airlines. Thus, Indian Oil Corporation Limited (IOCL) is an example of downstream stock.

Who Should Invest in Indian Oil & Gas Companies?

Anyone can invest in Indian oil and gas companies; however, investors with a long-term horizon, and those who are comfortable with risk can consider investing. Additionally, many Indian oil and gas companies have a history of paying regular dividends to shareholders. One must consider risk appetite and investment goals before investing.

Benefits of Investing in Oil Shares

Investing in oil sector stocks can provide several potential benefits, from the consistent demand for energy to the potential for good dividends. Thus, some of the other benefits of investing in oil shares include:

• Diversification: The oil sector can be a valuable addition to a diversified investment in the oil portfolio. Additionally, it offers exposure to a different industry than traditional stocks, such as technology or healthcare.

• Potential for High Returns: The oil & gas companies can be highly profitable during high demand and limited supply periods. It may lead to the potential for high returns for investors.

• Dividend Income: Many oil & gas companies pay their shareholders dividends, providing a steady income stream.

• Inflation Hedge: The oil and gas stock prices tend to rise along with inflation. This can help investors protect their purchasing power over time.

• Geopolitical Stability: Some oil companies’ share prices operate in politically stable countries, providing a relatively secure investment opportunity compared to other emerging markets.

Challenges While Investing in Oil Shares India

Every investment comes with its challenges and difficulties. Thus, let’s understand the two primary challenges while investing in the best oil company shares to buy in India.

• Price Volatility: The high degree of price volatility in oil and gas companies poses one of the biggest challenges for those investing in oil-related stocks in India. Many factors can affect oil share prices, including global supply and demand, geopolitical tensions, and natural disasters.

• Environmental Concerns: Another challenge facing investors while investing in oil stocks in India is the ecological impact of fossil fuels. As environmental awareness increases, stakeholders are pressuring oil and gas companies in India to reduce their carbon footprint and transition to sustainable sources. As a result, it can be challenging for oil and petrol shares in India to maintain profitability.  

Mitigate Challenges with Energy Tracker smallcase

Now, you’re aware of the challenges associated with investing in oil shares. You might want to know how we can diversify the risks involved. Fret not, you can track the performance of multiple oil company stocks by investing in Energy Tracker smallcase.

Energy Tracker Smallcase is an innovative investment product that enables investors to gain exposure to the energy sector in a diversified and efficient manner. It comprises a basket of stocks from various sub-sectors of the energy industry. Including oil and gas exploration, renewable energy, and utilities. 

This smallcase offers several compelling reasons: 

• The consistent demand for energy makes it a resilient investment option. 
• Portfolio investing is practised as it enables you to invest in a range of companies, thereby mitigating the risks. 
• Offers a balanced exposure to the sector while including traditional and renewable energy companies. 

Energy Tracker smallcase by Windmill Capital

To Wrap It Up…

To conclude, energy needs are growing faster as income levels and population show rising trends in the country. Since renewable energy stocks are increasing due to the government’s push for net zero emissions by 2070, investing in natural gas and oil shares can offer attractive returns shortly. Therefore, consider your investment goals and risk appetite before investing in any natural gas shares price or petroleum stocks India.

However, you can also invest in Energy Tracker smallcase to avoid the hassle of researching and choosing the best oil and gas company stocks.

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