Best Oil and Gas Stocks in February 2025: ONGC, HPCL and More – Based on 5-Yr CAGR

According to the IEA (International Energy Agency) in the India Energy Outlook 2021, India’s primary energy demand is expected to nearly double, reaching 1,123 million tonnes of oil equivalent, as the India’s GDP is projected to grow to US$ 8.6 trillion by 2040. In the past decade, India’s refining capacity has grown from 215.1 million metric tons per annum (MMTPA) to 256.8 MMTPA. This is expected to rise further to 309.5 MMTPA by 2028.

India is anticipated to be one of the largest contributors to the global growth in non-OECD petroleum consumption. The consumption of petroleum products in the country has improved from 158.4 MMT in the fiscal year 2013-14 to 234.3 MMT in 2023-24.

With India’s growing demand in the oil and gas sector, let’s explore the top oil and gas stocks to keep an eye on in January 2025.

Best Oil and Gas Stocks in February 2025 – 5yr CAGR Basis

Note: The best oil and gas stocks listed here are as of February 03, 2025. The stocks are sorted based on their 5Y CAGR. 

Overview of the Best Oil and Gas Stocks

1. Oil and Natural Gas Corporation Limited

ONGC is a government-owned company and India’s largest oil and gas explorer and producer. It contributes about 70% of the country’s crude oil production and around 84% of its natural gas output.

In Q3 FY24, ONGC reported a revenue of ₹33,716.80 crore, slightly lower than ₹33,880.88 crore in Q2 FY24. Net profit stood at ₹8,239.92 crore, down from ₹11,984.02 crore in the previous quarter. 

Key metrics:

• Earning per Share (EPS): ₹31.03
• Return On Equity (ROE): 11.94%

2. Hindustan Petroleum Corporation Limited

Hindustan Petroleum Corporation Limited (HPCL) is an Indian government-owned company in the petroleum and natural gas sector. Headquartered in Mumbai, it operates under the Ministry of Petroleum and Natural Gas. HPCL is a subsidiary of ONGC, which is owned by the Government of India.

In Q3 FY24, Hindustan Petroleum Corporation Limited (HPCL) reported revenue of ₹1,18,936.19 crore, up from ₹1,08,216.38 crore in the previous quarter. The company’s net profit surged to ₹3,022.90 crore in December 2024, compared to ₹631.18 crore in September 2024. 

Key metrics:

• EPS: ₹32.20
• ROE: 17.04%

3. GAIL Limited

GAIL Limited is a government-owned energy company in India. It mainly focuses on the trade, transmission, and distribution of natural gas. GAIL is also involved in exploring and producing solar and wind power, as well as providing telecom, telemetry services, and electricity generation.

In December 2024, GAIL Limited reported a revenue of ₹34,957.76 crore and a net profit of ₹3,867.38 crore. For September 2024, the revenue was ₹32,930.72 crore, with a net profit of ₹2,671.93 crore.

Key metrics:

• EPS: ₹11.58
• ROE: 10.80%

4. Petronet LNG Ltd

Petronet LNG Ltd was established in 1998 as a joint venture between GAIL, Indian Oil, Bharat Petroleum, and ONGC, each holding a 12.5% stake, to build, own, and operate liquefied natural gas (LNG) import and regasification terminals in India.

In the quarter ending December 2024, Petronet LNG Ltd reported a revenue of ₹12,226.86 crore and a net profit of ₹866.99 crore. For the quarter ending September 2024, the revenue was ₹13,021.82 crore, with a net profit of ₹847.62 crore.

Key metrics:

• EPS: ₹23.96
• ROE: 19.43%

5. Bharat Petroleum Corporation Limited

Bharat Petroleum Corporation Limited is a state-owned oil and gas company based in Mumbai, India. It is the second-largest government-owned oil producer in the country, with its operations managed by the Ministry of Petroleum and Natural Gas. The company runs 3 refineries in Bina, Kochi, and Mumbai.

In the quarter ending December 2024, Bharat Petroleum Corporation reported a revenue of ₹1,27,520.50 crore and a net profit of ₹4,649.20 crore. This compares to a revenue of ₹1,17,951.69 crore and a net profit of ₹2,397.23 crore in the previous quarter.

Key metrics:

• EPS: ₹32.93
• ROE: 18.74%

Best Oil and Gas Stocks in India in February 2025 – Market Cap Basis

Note: The best oil and gas stocks listed here are as of February 03, 2025. The stocks are sorted based on their market cap. 

Best Oil and Gas Stocks in India in February 2025 – Net Profit Margin Basis

Note: The best oil and gas stocks listed here are as of February 03, 2025. The stocks are sorted based on their net profit margin. 

Oil and Gas Industry in India Outlook

India’s rapid economic growth is driving an increased demand for oil, especially for production and transportation. Crude oil consumption is expected to grow at a compound annual growth rate (CAGR) of 4.59%, reaching 500 million tonnes by FY40, up from 223 million tonnes in FY23. 

In terms of barrels, oil consumption in India is predicted to rise from 4.05 million barrels per day (MBPD) in FY22 to 7.2 MBPD by 2030 and 9.2 MBPD by 2050. Diesel demand in India is expected to double to 163 million tonnes by 2029-30, with diesel and petrol together making up 58% of India’s oil demand by 2045. Given strong economic growth and increasing urbanisation, demand for oil is expected to remain high.

Natural gas consumption is forecast to grow at a CAGR of 12.2%, reaching 550 million cubic meters per day (MCMPD) by 2030, up from 174 MCMPD in 2021.

Indian refiners are set to add 56 million tonnes per annum (MTPA) by 2028, bringing the total domestic capacity to 310 MTPA. India also plans to double its oil refining capacity to 450-500 million tonnes by 2030.

Factors to Consider Before Investing in Oil and Gas Stocks in India

• Market Volatility and Price Variations

Fluctuations heavily influence oil and gas stocks in global oil prices. Changes in supply and demand or geopolitical events can have a major impact on a company’s profitability. It is important to monitor oil price trends and how companies manage these fluctuations.

• Government Policies and Regulations

Policies like subsidies, taxes, and environmental rules can impact the profitability of oil and gas companies. Investors should understand how shifts in government regulations could influence a company’s operations and costs.

• Company’s Financial Health

Evaluating a company’s financial health, including revenue growth, profit margins, and debt levels, is crucial. Companies with low debt and stable earnings are better positioned to weather market volatility.

• Operational Efficiency and Infrastructure

Operational efficiency and robust infrastructure are essential for profitability. Companies with well-managed production and distribution networks, as well as a focus on technological advancements, are likely to handle costs effectively and seize growth opportunities.

Conclusion

Investing in oil and gas stocks requires careful assessment of a company’s financial stability, market standing, growth potential, and the risks associated with fluctuating energy prices and regulatory changes. Aligning these factors with an overall investment strategy helps ensure a well-informed approach to the ever-changing oil and gas industry. Make sure to seek advice from a financial expert to meet specific investment objectives and manage risk tolerance effectively.

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.