Top Oil Shares in India (2024): Meaning, Types, Benefits, Features

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.

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	Sub-Sector	Market Cap (Rs. in Cr)	Close Price (Rs.)	1Y Return (%)	5Y Average Net Profit Margin	5Y Average Return on Investment	Fundamental Score
Oil and Natural Gas Corporation Ltd	Oil & Gas - Exploration & Production	371,369.84	295.2	57.23	6.15	9.00	11.00
Reliance Industries Ltd	Oil & Gas - Refining & Marketing	2,027,094.55	2995.9	27.89	7.95	6.74	9.71
Oil India Ltd	Oil & Gas - Exploration & Production	91,773.21	564.2	206.46	20.72	12.48	7.75
Jindal Drilling and Industries Ltd	Oil & Gas - Equipment & Services	1,766.11	609.4	6.08	-39.67	-3.45	7.65
United Drilling Tools Ltd	Oil & Gas - Equipment & Services	493.87	243.25	-1.18			7.41
Petronet LNG Ltd	Oil & Gas - Storage & Transportation	50,445.00	336.3	39.98	7.78	20.61	7.33
Great Eastern Shipping Company Ltd	Oil & Gas - Storage & Transportation	17,219.15	1206.1	41.71	26.82	12.40	6.94
Indian Oil Corporation Ltd	Oil & Gas - Refining & Marketing	241,981.54	171.36	86.26	3.26	9.15	6.57
Asian Energy Services Ltd	Oil & Gas - Exploration & Production	1,597.88	358.65	123.18	0.71	6.99	6.57
Aegis Logistics Ltd	Oil & Gas - Storage & Transportation	26,263.58	748.25	130.94	5.58	9.28	6.56

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 on this list is from 25th September 2024, and the data is derived from the Tickertape Stock Screener.

• Sector > Energy: Select all – Equipment & Services, Exploration & Production, Refining & Marketing, and Storage & Transportation
• 1Y Return
• 5Y Average Net Profit Margin
• 5Y Average Return on Investment
• Fundamental Score: Set to High – Sort from highest to lowest

🚀 Pro Tip: You can use Tickertape’s Stock Screener to research and evaluate stocks with over 200+ filters and parameters.

Oil and Gas Company’s Shares: A Brief Overview

Let’s review the Oil stocks listed above:

Oil and Natural Gas Corporation Ltd

Oil and Natural Gas Corporation (ONGC), India’s largest producer of crude oil and natural gas, was founded on 14th August 1956 by the Indian government. The company focuses on oil exploration to boost the country’s crude oil production. ONGC has played a crucial role in discovering 8 of India’s 9 producing basins. Over the last 5 years, the company’s debt-to-equity ratio has been 48.95, lower than the industry average of 49.34. Additionally, the company shows positive signs of profitability with a return on equity (ROE) of 14.73%, and a cash flow margin of 16.37%. 

Reliance Industries Ltd

Reliance Industries Limited, an Indian multinational conglomerate, is based in Mumbai, Maharashtra. Founded in 1958 by Dhirubhai Ambani as Reliance Commercial Corporation, it started as a small textile manufacturing unit. The company is now engaged in refining manufacturing of refined petroleum products, and petrochemicals, including manufacturing of basic chemicals, fertilizers and nitrogen compounds, plastic and synthetic rubber in primary forms. Over the last 5 years, the company’s revenue has grown at a yearly rate of 9.69%, higher than the industry average of 8.87%, and its market share increased from 32.14% to 33.37%. 

Oil India Ltd

Oil India Limited (OIL) is engaged in exploring, developing, producing, and transporting crude oil and natural gas, alongside producing LPG and generating renewable energy. Established on 18 February 1959 as a joint venture between Burmah Oil Company and the Government of India, OIL expanded its operations in 1963 by commissioning and maintaining crude oil pipelines. Over the last 5 years, the company’s revenue has grown at a yearly rate of 16.37%, higher than the industry average of 7.39%, market share increased from 3.57% to 5.34%. 

Jindal Drilling and Industries Ltd

Jindal Drilling & Industries, originally established as Jindal Leasing by the Jindal Group (B C Jindal) in 1983, adopted its current name in 1989. The company primarily conducts drilling operations for ONGC using leased jack-up rigs and handles mud-logging activities. It also re-threads casing pipes for ONGC and OIL on a job-work basis and trades steel pipes. Over the last 5 years, the company’s revenue has grown at a yearly rate of 17.41%, higher than the industry average of 4.14%, and its market share increased from 11.53% to 19.51%. 

United Drilling Tools Ltd

United Drilling Tools Ltd is a global leader in manufacturing downhole tools, handling tools, gas lift equipment, wireline, and well-service equipment. Its production facilities are tailored to produce standard precision equipment and customised tools, meeting international standards through technical collaboration with renowned European and American manufacturers. As of 25th September 2024, the company had a market capitalisation of Rs. 493.87 cr., and its share price closed at Rs. 243.25. Furthermore, United Drilling Tools Ltd had a net profit margin of 7.19% and a fundamental score of 7.41.

Petronet LNG Ltd

Petronet LNG Limited plays a key role in India’s energy sector. It developed the country’s first LNG receiving and regasification terminals, located in Dahej, Gujarat, and Kochi, Kerala. As of March 2022, the Dahej terminal has a capacity of 17.5 million metric tonnes per annum (MMTPA), while the Kochi terminal has a capacity of 5 MMTPA. Together, these facilities manage approximately 33% of India’s gas supply, making a substantial contribution to the nation’s energy requirements. Over the last 5 years, the company’s debt-to-equity ratio has been 25.69, lower than the industry average of 36.44, and its current ratio has been 349.24, higher than the industry average of 313.76. 

Great Eastern Shipping Company Ltd

Great Eastern Shipping Company Limited (GE Shipping), India’s largest private sector shipping company, was incorporated on 3rd August 1948. The company operates in two main sectors: shipping and offshore. Its shipping business transports crude oil, petroleum, gas, and dry bulk commodities. Meanwhile, through its wholly-owned subsidiary, Greatship (India) Limited, its offshore division provides services to the best oil and gas companies in India for offshore exploration and production activities. Over the last 5 years, the company’s revenue has grown at a yearly rate of 9.1%, higher than the industry average of 6.94%, and its market share increased from 7.72% to 8.51%. 

Indian Oil Corporation Ltd

Indian Oil Corporation Limited (IOC) holds the ‘Maharatna’ status granted by the Government of India. Established in 1964 through the merger of Indian Oil Company Limited and Indian Refineries Limited, IOC stands as India’s largest integrated energy firm. It operates across various sectors, including oil, petrochemicals, gas, and alternative energy. The company’s activities encompass refining, pipeline operations, and marketing. Over the last 5 years, the company’s net income has grown at a yearly rate of 19.15%, higher than the industry average of 17.55%. 

Asian Energy Services Ltd

Asian Energy Services Ltd operates in the oilfield sector, specialising in reservoir imaging and geophysical services. The company focuses on land and well seismic services, along with the operation and maintenance of oilfields. It is among the few firms offering comprehensive end-to-end services within the upstream oil segment. Over the last 5 years, the company’s revenue has grown at a yearly rate of 10.81%, higher than the industry average of 7.39%, and its market share increased from 0.04% to 0.05%. 

Aegis Logistics Ltd

Aegis Logistics Limited focuses on the import and distribution of Liquefied Petroleum Gas (LPG) and operates storage and terminal facilities for LPG and chemical products. The company has storage sites in Mumbai, Haldia, Pipavav, and Mangalore. Aegis Group manages the entire logistics value chain, encompassing sourcing, terminal operations, and retail distribution of LPG. As of 25th September 2024, the company had a market capitalisation of Rs. 26,263.58 cr., and its share price closed at Rs. 748.25. Furthermore, the company has a net profit margin of 7.87%, and its ROE is 13.38%.

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.

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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 crude oil stock in India could 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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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).

How to Identify Best Gas and Oil Shares for Investing?

Identifying oil and the 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: It can be helpful to familiarise yourself 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.

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, including edible oil stocks, 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 the best oil stocks 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 categorised into three different categories that have been listed below:

• Upstream Stocks: This primarily involves oil and natural gas exploration and production. These petrol stocks in India 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, including oil refinery stocks in India, 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, including CNG related stocks in India, 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 price volatility in oil and gas companies poses one of the biggest challenges for those investing in even the best oil company 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. 

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 in 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.

Frequently Asked Questions on Oil Stocks in India

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