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List of Top Oil & Gas Sector Stocks to Buy in India in 2024

List of Top Oil & Gas Sector Stocks to Buy in India in 2024
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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. Resulting in making India 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. In light of the changing landscapes, gas stocks 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 oil shares. 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. Such as 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 can be volatile due to the cyclical nature. Additionally, it may be an impact of external factors on 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 NameMarket Cap (in Cr)Share Price5Y Average Return on Investment
Petronet LNG Ltd₹36,030₹259.921.00
United Drilling Tools Ltd₹594₹278.1517.45
Gagan Gases Ltd₹12₹23.4517.32
Kotyark Industries Ltd₹1,067₹1,207.915.72
Hindustan Oil Exploration Company Ltd₹2,291₹177.1515.01
Seamec Ltd₹2,926₹1,163.9513.47
Oil India Ltd₹42,882₹396.2512.33
Confidence Petroleum India Ltd₹2,492₹8411.38
Advance Petrochemicals Ltd₹16₹188.611.37
Aegis Logistics Ltd₹13,215₹384.110.26
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 23rd January, 2024. However, for real-time updates on oil and gas stock prices and market trends, visit smallcase stocks collection today!

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Oil and Gas Company’s Shares – A Brief Overview

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

  • Petronet LNG Ltd: Petronet LNG is a leading Indian energy company that specializes in the import, regasification, and distribution of liquefied natural gas (LNG). The company plays a crucial role in meeting the growing demand for clean energy in the country.
  • 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.
  • Gagan Gases Ltd: Gagan Gases is a prominent industrial gases manufacturer in India, catering to diverse sectors such as healthcare, manufacturing, and electronics. The company’s commitment to quality and innovation has established it as a reliable player in the industrial gases market.
  • Kotyark Industries Ltd: A dynamic player in the manufacturing sector, focusing on the production of high-quality steel and metal products. The company’s dedication to excellence and technological advancement positions it as a key contributor to India’s industrial landscape.
  • Hindustan Oil Exploration Company Ltd: Hindustan Oil Exploration Company is actively engaged in the exploration and production of oil and gas. Thus, with a focus on sustainable practices and cutting-edge technologies, the company plays a vital role in India’s quest for energy self-sufficiency.
  • Seamec Ltd: Seamec is a renowned offshore services provider, offering a range of services in underwater engineering and subsea construction. The company’s expertise in marine operations positions it as a valuable asset in India’s offshore oil and gas exploration activities.
  • Oil India Ltd: A major player in the exploration, production, and transportation of crude oil and natural gas. The company’s strategic initiatives and commitment to technological advancement contribute significantly to India’s energy security.
  • Confidence Petroleum India Ltd: Confidence Petroleum is a leading player in the LPG business. It provides reliable and safe LPG solutions to households and industries. The company’s commitment to customer satisfaction and safety makes it a trusted name in the energy sector.
  • Advance Petrochemicals Ltd: A key player in the petrochemical industry and specializes in the chemical production. The company’s focus on innovation and sustainability positions it as a significant contributor to India’s chemical manufacturing sector.
  • Aegis Logistics Ltd: Aegis Logistics operates in the oil and gas logistics sector. It specializes in the storage, transportation, and distribution of petroleum products and chemicals. The company’s strategic infrastructure and logistics solutions contribute to the efficient movement of energy resources in the market.

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 the oil and gas companies in India, covering all supply chain links. These include from exploration and production to 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. 

Looking ahead, the Indian Oil & Gas sector is projected to grow at a moderate pace. With crude oil share in India’s energy mix expected to decline gradually. Therefore, companies in the Indian Oil & Gas sector are adapting to new challenges and exploring new opportunities. As a result, investing in the crude oil stocks in India can be a good investment opportunity for the investor. 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

  • 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 stocks with strong growth potential or sustainable dividends.
  • Financial Performance: Analyze company financials, including revenue, profitability, debt levels, and cash flow.

Research Individual Companies

  • 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: Analyze 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. Invest in a variety of oil and gas stocks, as well as other sectors, to mitigate risk.

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, and this can lead to significant volatility in the gas and oil share prices. This volatility can be a source of risk for investors. However, it can also create opportunities for those who are able to 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. This 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 are able to 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 the attention of investors. This could lead to increased demand for oil and gas companies that are able to 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. For global exposure, consider investing in international energy companies listed on foreign stock exchanges through international brokerage accounts or ETFs that track global energy indices.

However, if you’re confused about which stocks to pick, you can explore smallcases:

  1. smallcases are readymade portfolios of stocks/ETFs, that are based on a theme idea or strategy
  2. They’re created and managed by SEBI-registered experts
  3. smallcase.com offers over 200+ stock portfolios, created by 180+ managers
  4. Some of the popular smallcases among new investors are as follows:

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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 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.

Benefits of Investing in Oil Shares

Investing in oil sector stocks can provide a number of 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 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 periods of high demand and limited supply. This may lead to the potential for high returns for investors.
  • Dividend Income: Many oil & gas companies pay dividends to their shareholders, which can provide a steady income stream.
  • Inflation Hedge: The oil and gas stock prices tend to rise along with inflation. Thus, this can help investors protect their purchasing power over time.
  • Geopolitical Stability: Some oil companies operate in politically stable countries, providing a relatively secure investment opportunity compared to other emerging markets.

Challenges While Investing in Oil Stocks India

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

  • Price Volatility: The high degree of price volatility in the oil & gas companies poses one of the biggest challenges for those investing in oil related stocks in India. A wide range of 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 environmental 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. This can make it more challenging for oil shares to maintain profitability. 

Mitigate Challenges with Energy Tracker smallcase

Now you’re aware of the challenges associated while 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 like: 

  • The consistent demand for energy makes it a resilient investment option. 
  • Portfolio investing is practiced 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. 

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To Wrap It Up…

To conclude, energy needs are growing faster as income levels and population both show rising trends in the country. Since renewable energy stocks are rising due to the government’s push for net zero emissions by 2070, investing in natural gas and oil shares can offer you 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.

FAQs

1. What are the best oil and gas stocks in India you can buy for the long term?

According to the recent data, here are the 5 best oil company stocks to buy in India: 

1. Reliance Industries Ltd
2. Oil and Natural Gas Corporation Ltd
3. Indian Oil Corporation Ltd
4. Bharat Petroleum Corporation Ltd
5. Hindustan Petroleum Corp Ltd

Note: This information is provided for educational purposes and is not intended as a recommendation or endorsement.

2. How can I invest in oil & gas stocks?

You can invest in oil & gas stocks by following these steps:
1. Open an account with a brokerage firm.
2. Fund your account.
3. Research oil & gas companies and select the ones you want to invest in.
4. Buy shares of those companies.

3. Is it a good time to invest in natural gas and oil shares?

According to experts, it can be a good time to invest in natural gas and oil shares due to its long-term growth. However, it’s important to do your own research and/or consult a financial advisor before investing.

4. Who should invest in Indian oil & gas companies?

Anyone can invest in Indian oil and gas companies, however, investors with a long term horizon, those who are comfortable with risk or want to earn extra can consider investing. However, one must consider their risk appetite and investment goals before investing.

5. Which is the largest oil industry in India?

Oil and Natural Gas Corporation (ONGC) is one of the largest oil shares of Oil industry and is considered to be of strategic importance to the Indian economy as it accounts for 70% of India’s crude oil production.