As we move into 2025, the oil and gas sector in India remains a pivotal part of the economy, with several companies showing impressive growth. In its recent oil and gas outlook for FY26, India Ratings and Research forecasts that India’s oil and gas demand will remain robust.
The outlook anticipates strong demand will drive refinery and petrochemical capacity expansions in India, with a 22% increase expected in refinery capacity over the next 2-3 years.
As India continues to see strong demand in the oil and gas sector, let’s dive into the best oil and gas stocks to watch in January 2025.
| Name | Market Cap (₹ Cr) | PE Ratio | 5Y CAGR (%) | Net Profit Margin (%) | 1Y Return (%) | Debt to Equity |
| Oil India Ltd | 75,360.74 | 11.9 | 35.34 | 18.49 | 81.31 | 0.46 |
| Hindustan Petroleum Corp Ltd | 87,815.24 | 5.48 | 18.1 | 3.66 | 51.47 | 1.42 |
| Oil and Natural Gas Corporation Ltd | 3,09,562.93 | 6.29 | 13.96 | 8.12 | 18.85 | 0.42 |
| Indian Oil Corporation Ltd | 1,94,816.60 | 4.67 | 10.26 | 5.34 | 5.68 | 0.7 |
| Petronet LNG Ltd | 49,162.50 | 13.46 | 4.03 | 6.85 | 44.61 | 0.17 |
| Bharat Petroleum Corporation Ltd | 1,28,810.23 | 4.8 | 4.02 | 5.95 | 30.15 | 0.72 |
Note: The best oil and gas stocks listed here are as of January 03, 2025. The stocks are sorted based on their 5Y CAGR, with a positive year-to-date return and a positive net profit margin.
Indian Oil Corporation is India’s largest oil refining and marketing company, with a significant presence across the entire petroleum value chain. IOCL operates 10 refineries with a combined capacity of 80 million metric tonnes per annum.
For the quarter ending September 30, 2024, IOCL reported a net loss of ₹169 crore, significantly lower than the ₹13,114 crore profit in the same period last year. Despite this, the company generated ₹1.98 trillion in revenue, but its operating margin was hit due to a decline in refining and marketing margins.
Key metrics:
Hindustan Petroleum Corporation Limited is a major Indian oil and gas company involved in refining, marketing, and distribution of petroleum products. It operates two major refineries in Mumbai and Visakhapatnam.
For the quarter ending September 30, 2024, HPCL’s net profit plummeted by 98% year-on-year to ₹142.7 crore, primarily due to reduced refining margins. Despite this, its revenue grew by 5%, reflecting stronger sales volumes and a slight recovery in global oil prices.
Key metrics:
ONGC is engaged in the exploration, production, and marketing of oil and natural gas. It is one of the largest producers of crude oil and natural gas in India.
For the quarter ending September 30, 2024, ONGC’s net profit fell by 25% year-on-year to ₹10,272.5 crore. The company’s revenue increased by 7.25% to ₹1,58,329.10 crore, while its expenses rose by 15.34%, impacting its operating margin.
Key metrics:
Indian Oil Corporation (IOCL) is a leading Indian oil and gas company, engaged in refining, marketing, and distribution of petroleum products, with a strong presence in the global energy sector.
For the quarter ending September 30, 2024, IOCL reported a net loss of ₹169.58 crore, compared to a net profit of ₹13,114.3 crore in Q2 FY24. Revenue from operations declined by 3.24%, reaching ₹1.98 trillion, while expenses rose by 7.49%, reflecting a significant dip in refining and marketing margins.
Key metrics:
Petronet LNG Limited is India’s largest importer of liquefied natural gas (LNG), with significant infrastructure including the Dahej and Kochi LNG terminals.
For the quarter ending September 30, 2024, Petronet LNG recorded a 1.73% increase in net profit, reaching ₹870.6 crore. Its revenue from operations for the quarter stood at ₹13,024.29 crore, marking a 3.92% rise from the previous year, while the operating margin remains strong.
Key metrics:
Oil and gas stocks are highly sensitive to global oil price fluctuations. Price changes due to supply-demand shifts or geopolitical factors can significantly impact company profits. It’s crucial to track oil prices and how companies manage these fluctuations.
Government policies such as subsidies, taxation, and environmental regulations can affect oil and gas companies’ profitability. Investors should be aware of how changes in policies can influence company performance and costs.
A company’s financial health, including revenue growth, profit margins, and debt levels, is key to assessing its stability. Low debt and consistent earnings are indicators of a company’s ability to thrive during market downturns.
Efficient operations and solid infrastructure are crucial for profitability. Companies with well-managed production and distribution systems, along with technological innovations, can better handle costs and maximise growth opportunities.
Before investing in oil and gas stocks, it is essential to thoroughly evaluate each company’s financial stability, market position, growth potential, and the risks associated with volatile energy prices and regulatory changes. Aligning these factors with an overall investment strategy ensures a well-informed approach to navigating the dynamic oil and gas sector. Additionally, consulting a financial advisor can provide personalised insights to help meet specific investment goals and manage risk tolerance.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks, read all the related documents carefully before investing.
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